Last month, the won-dollar exchange rate fluctuated wildly due to U.S. tariff policies, recording an average volatility that was the highest in 2 years and 5 months.
According to the Bank of Korea, the average fluctuation and fluctuation rate (compared to the previous day and based on weekly transactions) of the won-dollar exchange rate in April were analyzed at 9.7 won and 0.67%, respectively.
The volatility was the highest since the sharp fluctuations in November 2022 (12.3 won, 0.9%) due to expectations of a slower tightening pace by the U.S. Federal Reserve (Fed). It more than doubled compared to March (4.3 won, 0.29%).
The exchange rate rose to 1,487.6 won, the highest level since the financial crisis, during weekly transactions on the 9th of last month when the U.S. reciprocal tariff went into effect. However, two days later, on the 11th, it fell to 1,420.0 won during overnight transactions. This was influenced by U.S. President Donald Trump’s announcement that there would be a 90-day grace period for countries other than China, just over 13 hours after the reciprocal tariff took effect.
Subsequently, as the U.S. began tariff negotiations with several countries, including South Korea, the exchange rate fluctuated between 1,410 and 1,440 won. On the 2nd, it finished weekly transactions at 1,405.3 won, the lowest level since the state of emergency, and fell to 1,391.5 won during overnight transactions. It was the lowest based on intra-day lows since November 29 of last year (low of 1,390.2 won) before the state of emergency.