Won Falls Below 1,400 Per Dollar for First Time in 10.5 Months
The South Korean won strengthened past the 1,400-per-dollar level on Aug. 19, marking its first move into the 1,300 range in about 10.5 months.The dollar fell to 1,399.0 won against the Korean currency as of 12:02 p.m. in Seoul, the first time the exchange rate had fallen below 1,400 since Oct. 2 la
The South Korean won has broken below the 1,400-per-dollar mark for the first time in about 10.5 months, reaching 1,399.0 won against the dollar as of 12:02 p.m. in Seoul. This marks the lowest exchange rate for the currency since October of the previous year. The won has gained more than 160 won from its June 6 peak of 1,561.5 won, the strongest dollar level in 17 years.
The decline in the dollar was driven by weaker-than-expected U.S. inflation data and a drop in retail sales, which raised expectations that the Federal Reserve might ease its monetary policy. These factors have put downward pressure on the dollar and supported the won. Foreign-exchange supply and demand changes have also contributed to the won's gains.
The Federal Reserve's interest-rate futures markets now price a 31% probability of a 25-basis-point rate hike at the upcoming September Federal Open Market Committee meeting. Weaker U.S. inflation data, declining retail sales, and expectations for a possible Fed rate cut have all supported the won. However, analysts caution that the recent move may not signal the start of a sustained won appreciation.
U.S. inflation remains above the Fed's target, and a rebound in employment or another rise in global oil prices could alter the outlook. Geopolitical risks and energy-price uncertainty could also limit the won's gains.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
