On the 17th, the won/dollar exchange rate closed at over 1,410 won, falling by more than 7 won from the previous transaction day. The relative strength of the won was influenced by the global dollar's weakness and the Bank of Korea's decision to freeze interest rates.

On this day, the weekly closing price of the won/dollar exchange rate in the Seoul foreign exchange market, based on the 3:30 p.m. calculation, recorded 1,418.9 won, down 7.8 won from the previous transaction day's closing price. The exchange rate closing fell to the 1,410 won range for the first time in four months since Dec. 6 of last year (1,419.2 won).

On the afternoon of the 17th, the stock market and exchange rate closing prices are displayed on the electronic board of Hana Bank's headquarters dealing room in Jung-gu, Seoul. /Courtesy of News1

The exchange rate started at 1,416 won, down 10.7 won from the previous transaction day's closing price. After the Bank of Korea froze the base rate, it rose to 1,423.3 won but then reduced its increase, finishing trading in the upper 1,410 won range.

The drop in the exchange rate is attributed to concerns over a U.S. recession. The industrial production index for March in the U.S. fell 0.3% month-over-month to 103.9, larger than market expectations (-0.2%). Industrial production is an indicator measuring the total production fluctuations in the manufacturing and mining sectors, reflecting the U.S. industrial economy and economic situation.

Market concerns became more pronounced after Jerome Powell, chair of the Federal Reserve, mentioned the possibility of an economic slowdown. Powell noted, "The level of tariff increases announced by the administration so far is much higher than expected," adding that "the impact on the economy is likely to be the same, which could include rising inflation and slowed growth."

The dollar index, which temporarily exceeded 100, has fallen to around 99. According to Investing.com, as of 4:23 p.m. on this day, the dollar index recorded 99.67. In contrast, currencies such as the yen and euro are strong, with the dollar/yen (yen per dollar) at around 142 yen and the euro/dollar (dollars per euro) at approximately 1.1362.

The Bank of Korea's interest rate freeze also contributed to the decline in the exchange rate. On this day, the Monetary Policy Committee decided to maintain the interest rate at 2.75% per annum, considering the rapidly rising exchange rate following the announcement of the U.S. reciprocal tariff policy and concerns over household debt. Thus, the trend of interest rate cuts that resumed in February has temporarily paused.

Experts believe that the exchange rate could drop further. Park Sang-hyun, a researcher at iM Securities, stated, "There are tariff concerns, but the U.S. also prefers a weak dollar, and when the exchange rate report is released in April, uncertainty regarding the won will be resolved, applying upward pressure on its value."

Min Kyung-won, a researcher at Woori Bank, remarked, "As Asian currencies like the yen strengthen due to the weak dollar, the positive sentiment for the won could also be extended," and added, "Given that the won's increase has not been large compared to the drop in dollar value, we can expect an influx of offshore short plays (dollar sales) taking advantage of the weak dollar."