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The won-dollar exchange rate started to decline slightly on the 9th while the so-called ‘king dollar’ phenomenon, approaching 1,300 won, continued.
On the same day, the won-dollar exchange rate in the Seoul foreign exchange market started trading at 1272.0 won, down 0.7 won from the closing price of the previous trading day.
The dollar fluctuated over the results of the US employment report, but weakened with the euro. The dollar rose on expectations of a soft landing and fears of tightening tightening by the US Federal Reserve following 428,000 new jobs from non-farm households in the US increased in April, beating market expectations.
However, following noting that the average hourly wage growth slowed to 0.3% from the previous month, the dollar turned weak, and the euro turned strong, with the European Central Bank (ECB) policy member remarking that interest rates might be raised. Since then, the US Treasury yield has risen, partially curbing the decline in the dollar.
Kim Yu-mi, a researcher at Kiwoom Securities, predicted that “the further decline is likely to be limited as external uncertainties remain.”
The won-dollar exchange rate this week is expected to be affected by the degree of economic slowdown in China and the rate of increase in the US consumer price index (CPI) for April, which will be announced on the 11th. This is because, as the worst-case economic scenario becomes a reality with the zero-corona quarantine policy, it might act as further downward pressure on the value of the yuan.
Park Sang-hyeon, a researcher at Hi Investment & Securities Co., said, “Until the Chinese government’s economic-related forward-looking measures become visible, it is highly likely that the yuan’s depreciation will continue.” The strong dollar is also expected to slow somewhat.
- reporter information
- Minji Seo
- [email protected]
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