The won-dollar exchange rate surged over 15 won as domestic political uncertainty expanded and the global dollar strengthened.
On 2nd, in the Seoul foreign exchange market, the won-dollar exchange rate started at 1,436.5 won, up 15.5 won from the previous trading day (April 30th) closing price of 1,421.0 won at 3:30 p.m.
The sharp rise in exchange rates appears to have been caused by the unprecedented 'triple acting' system, in which the fourth-highest-ranking social deputy took on presidential duties following the resignations of former Prime Minister Han Duck-soo and former Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok the previous night.
The re-ignition of judicial risks surrounding leading presidential candidate Lee Jae-myung of the Democratic Party of Korea also deepened political instability. On 1st, the Supreme Court overturned a lower court's ruling that had acquitted Lee of violating the Public Official Election Act, sending the case back with a guilty intent.
On an international level, progress in U.S.-China tariff negotiations has led to the resurgence of the global strong dollar, pushing up the exchange rate. China's state-run media, China Central Television (CCTV), reported on 1st that the U.S. had recently reached out to China through various channels for tariff negotiations.
According to Investing.com, the dollar index (DXY), which shows the dollar's value against major currencies, recorded 100.31 as of 9:43 a.m. that day. The dollar index maintained a level below 99 from November 11th to 30th as U.S.-China tensions escalated before surpassing 100 the previous day due to progress in tariff negotiations between the two countries.
Min Kyung-won, a researcher at Woori Bank, noted, 'Today's exchange rate is expected to rise due to the resurgence of the global strong dollar and domestic political risks surrounding the won,' adding, 'The rise in the dollar index has satisfied the conditions needed for an increase in the exchange rate.'