Won-Dollar Exchange Rate Plunges to Upper 1,400-Won Range… Largest Gain Among Major Currencies

The won-dollar exchange rate has plummeted to the 1,400-won range in just one month, marking the sharpest decline since the global financial crisis. The value of the won against the dollar rose the most among major currencies, driven by expectations of increased dollar selling following SK hynix’s U.S. stock listing, as well as the impact of U.S. and Japanese market intervention to curb the yen’s weakness.

Analysts suggest that the won’s value naturally rose in tandem with the yen, capitalizing on the tendency for the Korean won and Japanese yen to move in the same direction. Park Hyung-jung, an economist at Woori Bank, stated, "The won-dollar exchange rate could temporarily fall below the 1,400-won level."

However, the possibility of a U.S. rate cut next month and the expansion of overseas investments by individual investors, so-called 'Seohak ants,' could push the exchange rate back up. The pace of the yen’s appreciation is also a variable. If the yen surges, investors looking to reduce debt burdens may hurriedly offload assets. If selling pressure to unwind yen-carry trades spills over into the domestic stock market, the won could weaken and the exchange rate might rise once again.