Tourists are exchanging money at a currency exchange booth in Myeongdong, Jung-gu, Seoul. [News1]
Due to the strong dollar and weak yen, the won-dollar exchange rate has closed higher for eight consecutive trading days.
According to the Seoul foreign exchange market on the 12th, the won-dollar exchange rate closed at 1,468.4 won, up 10.8 won from the previous trading day. It is the first time the exchange rate has surpassed the 1,460 won mark since the government’s verbal intervention on December 24th last year.
The exchange rate started at 1,461.3 won, up 3.7 won. Although it dropped to 1,457.0 won at 9:53 AM, the increase gradually expanded, surging to 1,470.0 won by 3:01 PM.
Foreign investors’ large-scale selling of domestic stocks is considered a factor for the exchange rate rise. On this day, foreigners recorded a net selling of 351 billion won in the stock market.
Notably, due to the strong dollar and weak yen, the exchange rate touched the 1,470 won mark during the day.
The dollar’s strength in the global foreign exchange market seems to have been influenced by Jerome Powell, the chairman of the U.S. Federal Reserve, receiving a grand jury subpoena from the Department of Justice related to renovations at the Federal Reserve building.
Additionally, the won has been showing a trend linked to the yen’s weakness. The mention of early general elections in Japan last week heightened fiscal unrest concerns, increasing downward pressure on the yen.
The yen-dollar exchange rate rose to 158.199 yen during the day, reaching its highest level in a year since January 10th last year (158.877 yen).
Meanwhile, as the won-dollar exchange rate rises, “dollar deposits” are gaining popularity. This is because expected foreign exchange profits from the exchange rate increase, along with higher deposit interest rates compared to the won.
In reality, the won-dollar exchange rate, which recorded 1,430 won on October 30th last year, hit the 1,470 won range in November, then soared to the 1,480 won range last month. Despite closing at 1,447 won on December 31st last year due to government verbal intervention, it is rising again this year.
According to the financial sector, the dollar deposit balance of the top five banks recorded $67.9721 billion as of the 8th. This represents an increase of $778.23 million from the end of last year ($67.19387 billion), and in terms of won, it has surged by more than 1 trillion won.