The won-dollar exchange rate, which started at the 1300 won level in line with the surge of the Taiwan dollar's value, closed just below 1400 won after fluctuating more than 20 won during the day. This marks the first time that the exchange rate has fallen to the 1300 won level since the imposition of martial law.
On the 7th, the weekly closing price of the won-dollar exchange rate in the Seoul foreign exchange market (as of 3:30 p.m.) recorded a decline of 7.3 won from the previous trading day, closing at 1398 won. The exchange rate dropping to the 1300 won level is the first occurrence since the 29th of November last year (1394.7 won).
That day, the exchange rate began trading at 1380 won, a sharp decline of 25.3 won from the previous trading day. The opening price that day was the lowest level in six months since the 6th of November last year (1374 won). However, a rebound occurred later as it surpassed 1400 won at 1:38 p.m. and soared to 1402.3 won at 2:09 p.m., before coming back down.
The drop in the value of the won started due to rumors that there was pressure from the United States to appreciate during the trade negotiations between the U.S. and Taiwan. The Central Bank of Taiwan officially denied the U.S. pressure for appreciation, but in the market, expectations for Taiwanese dollar appreciation spread, leading to a 9% surge in the value of the Taiwan dollar over the two trading days on the 2nd and 5th. This represents the largest fluctuation in three years.
The fact that the United States and China are set to hold their first official dialogue this week also contributed to the strengthening of the won. U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative (USTR) Jamieson Greer, along with China's Vice Premier He Lifeng, are scheduled to meet in Switzerland on the 10th and 11th. This marks the first trade negotiations between the U.S. and China since the inauguration of the Trump administration.
However, as China expressed a stance that seemed to curb excessive optimism, the drop in the exchange rate was limited. The China’s Ministry of Commerce stated, "After fully considering the world's expectations, China's interests, and the appeals of American industries and consumers, we have agreed to engage with the U.S." It added, "If coercion and threats are carried out under the guise of negotiations, China will never respond."
According to Investing.com, the dollar-yuan exchange rate is at 7.19 yuan, while the dollar-yen exchange rate has dropped to the 142 yen level. The Australian dollar to U.S. dollar exchange rate is at 0.64 dollars, and the U.S. dollar to Singapore dollar exchange rate is also at 1.28 dollars.