The won-dollar exchange rate fluctuated by more than 30 won in one day, reaching its lowest level since the emergency rule was declared in December last year. Increased expectations for easing U.S.-China trade tensions and the release of dollar selling volumes ahead of a long holiday contributed to the volatility in the exchange rate.
On the 2nd, the weekly closing price of the won-dollar exchange rate in the Seoul foreign exchange market (as of 3:30 p.m.) closed at 1,405.3 won, down 15.7 won from the previous trading day (1,421.0 won). In terms of weekly closing price, this is the lowest since December 3rd of last year (1,402.9 won), when emergency rule was declared, marking the lowest in five months.
The exchange rate displayed a rollercoaster trend that day. Following the news of the resignation of former Prime Minister Han Duck-soo and former Minister of Economy and Finance Choi Sang-mok, the exchange rate opened at 1,436.0 won, up 15.5 won from the previous trading day's closing price. At the beginning of the session, it even rose to 1,439.8 won, threatening to breach the 1,440 won level.
However, in the afternoon, it fell below 1,430 won and rapidly declined, reaching as low as 1,403.5 won during the trading session. It rose slightly just before the market closed, finishing at around 1,405 won. The fluctuation range based on weekly transactions between the low and the high was 34.7 won, the largest since November 11, 2022 (37.4 won).
Park Soo-yeon, a researcher at MERITZ Securities, noted, "With the long holiday from the 3rd to the 6th approaching, it seems that investors who were buying dollars have been adjusting their positions." They also stated, "The recent increase in domestic and international uncertainties has made it difficult to predict the direction of the exchange rate, leading to a push for transactions to be settled."
Expectations for the easing of U.S.-China trade tensions also acted as downward pressure on the exchange rate. A spokesperson for China’s Ministry of Commerce said that day, "The U.S. side has actively sent messages to the Chinese side through related departments several times recently, expressing a desire to engage in dialogue with China," adding, "We are evaluating this matter."
As of 3:30 p.m., the won-yen exchange rate is 968.30 won per 100 yen, down 28.47 won from the previous trading day's closing price of 996.77 won at 3:30 p.m. The dollar index (DXY), which indicates the value of the dollar against six major currencies, stands at 99.872. It briefly recovered above 100 during the morning but fell back below 100 again.