Dollar-Won Exchange Rate Expected to Fluctuate Between 1,370 and 1,430 Won

The dollar-won exchange rate is expected to fluctuate within the range of 1,370 to 1,430 won after entering the 1,300 won level. In a report on the 21st, Choi Kyu-ho, a researcher at Hanwha Investment & Securities, stated that the dollar-won rate would face limited upward pressure around 1,400 won. Although the recent domestic dollar supply effect has weakened, he explained that the slowdown in U.S. indicators and changes in global dollar flows are suppressing the upper limit of the exchange rate. Choi analyzed that the influence of the supply and demand situation that had led to the strength of the won has diminished, adding that the recent surge in short-term swap rates indicates that the pressure to sell dollars has peaked. While the reduction in foreign selling of KOSPI and the inflow of funds into U.S.-listed Korean ETFs are positive for the won, he assessed that the contribution of stock supply and demand to the decline in the exchange rate has decreased. Due to the slowdown in U.S. employment, inflation, and consumption indicators, positions based on rising interest rates and a strong dollar have been reversed, and he projected that without improvements in U.S. indicators in the future, it would be difficult for the exchange rate to rise. Expectations of interest rate hikes by the Bank of Japan may also act as a factor to alleviate upward pressure on the dollar-won rate. Volatility still exists, and he warned that Samsung Electronics' dividend remittance and revisions to the U.S. employment report could widen the fluctuations in the exchange rate. Recently, the dollar-won exchange rate closed at 1,392.60 won, recording a level around 1,390 won.

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