Won Slips to Two-Year Low on Dollar Weakness

An employee is organizing dollars at the Hana Bank Anti-Counterfeit Center in Jung-gu, Seoul. (Yonhap) The won-dollar exchange rate broke the yearly intraday low on Oct. 16, falling to its lowest level in about two years. It rose early in the session due to concerns over inflation in the United States, but turned downward in the afternoon due to a weaker dollar and a rebound in the domestic stock market. In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1331.4 won, down 13.2 won from the previous trading day. It rose to as high as 1348.0 won at one point in the morning but fell to 1331.0 won around 3:29 p.m. Both the intraday low and the closing exchange rate are the lowest since Oct. 2, 2024. In the morning, concerns over inflation and additional tightening by the Federal Reserve (Fed) grew as the U.S. Producer Price Index (PPI) for September rose 1.3% compared to the previous month. However, in the afternoon, the dollar turned weaker as Fed Chair Kevin Warsh avoided mentioning whether there would be additional interest rate hikes. The rebound in the domestic stock market also affected the drop in the exchange rate. The KOSPI closed at 5668.05, up 2.05% from the previous trading day, and foreigners net bought 341.3 billion won (about $256.4 million) worth of domestic stocks, breaking a streak of net selling for eight consecutive trading days.