The won-dollar exchange rate fell to 1,360 won, marking the lowest level in over seven months. Concerns were raised about the consistency of economic policies as the United States reversed its plan to impose tariffs on Europe, leading to a decline in trust in the dollar, considered a safe asset.
On the 26th, the won-dollar exchange rate in the Seoul foreign exchange market closed at 1,364.4 won, down 11.2 won from the previous trading day's weekly transaction close (based on 3:30 p.m.) of 1,375.6 won.
The exchange rate started the day at 1,369.0 won and widened its decline in early trading, dropping to 1,360.5 won during the session. This is the lowest level based on intraday lows since October 15 of last year (1,355.9 won). However, it later showed a rebound trend, closing the weekly transaction in the mid-1,360 won range.
The impact of U.S. President Donald Trump's announcement of a 50% tariff on European imports, which was later postponed, was significant. On the 23rd (local time), President Trump announced tariffs against Europe via social media, but reversed this announcement just before the market opened that day, stating that the deadline for negotiations with the European Union (EU) would be extended to July 9.
Market participants interpreted the sudden announcement and postponement of the tariff as a spreading tariff risk associated with Trump. This heightened uncertainty in U.S. policies and decreased trust in the dollar, which had been viewed as a safe asset. According to Investing.com, the dollar index (DXY), which reflects the value of the dollar against the currencies of six major countries, recorded 98.82 as of 4:01 p.m., falling below 100.
In contrast, major Asian currencies are strong. The dollar-yen exchange rate is in the 142 yen range, while the dollar-yuan exchange rate is in the 7.16 yuan range.
Wijae-hyeon, a researcher at NH Futures, noted, "Recently, the dollar has been diverging from the bond and stock markets, and the weak dollar sentiment persists," adding that "U.S. Treasury Secretary Janet Yellen also acknowledged that the current weakness of the dollar is due to Japan's rate hike and Germany's fiscal expansion."
Park Sang-hyun, a researcher at iM Securities, stated, "The additional strength of the yen, along with various tariff negotiation news, will have a greater impact on the won-dollar exchange rate," forecasting that the exchange rate will fluctuate between 1,340 and 1,400 won this week.