Won closes at 1,328.1 per dollar in Seoul, extending a two-year low for daytime closes

The won-dollar exchange rate closed at 1,328.1 won in Seoul on 20 October, down 2.2 won from the previous daytime close, according to Yonhap, Newsis, Asia Economy and Chosun Ilbo. Newsis said it was the lowest daytime close since 2 October 2024, when the rate was 1,319.3 won. Seoul Economic Daily's headline called it the lowest close this year. [ 9 , 10 , 11 , 12 , 13 , 15 ]

Newsis said the dollar index, which measures the dollar against six major currencies, was 101.78 at 15:23, down from 101.98 the day before. It said the rate appeared to fall despite dollar strength because of a recovery in risk appetite and continued dollar sales. It cited a market assessment that the rate's decline held on the previous day despite dollar strength, which shows how strong dollar selling is. Newsis added that rising US Treasury yields and a weaker yen weigh on the won, and that the won's gains are likely to be limited unless outside constraints ease. It also said steady settlement demand from importers limits the fall in the rate. [ 13 ]

On 19 October the rate closed at 1,330.3 won, down 1.1 won, or 0.08%, from the previous daytime close, according to Yonhap, Newsis, Asia Economy and Chosun Ilbo. Seoul Economic Daily said it opened at 1,336.00 won and turned lower in the morning as foreign banks in particular kept selling dollars. It fell to 1,327.60 won at one point, below the 1,328.90 won low from overnight trading on 16 October, before recovering part of the fall to close near 1,330 won. [ 1 , 2 , 3 , 4 , 7 ]

Seoul Economic Daily said the won's strength is hard to explain by the dollar alone. It said the rate had fallen by more than 200 won from the 1,550 won range in early July while the global dollar rose slightly, and that the yen and yuan had appreciated far less than the won. It pointed to a larger current account surplus driven by chip exports. According to the Bank of Korea, the surplus for January to August was 279.2 billion dollars, about four times the figure a year earlier. [ 7 ]

Seoul Economic Daily also quoted Lee Hyung-il, Deputy Prime Minister and Minister of Finance and Economy, who described the recent fall in the rate as a process of returning to the economy's fundamentals. He said the rate of 1,550 won reached in July had itself looked like a departure from fundamentals. The paper said the market leans toward the won strengthening and gives weight to a further fall. [ 7 ]

In its 19 October report, Newsis said dollar sales by chip exporters were steadily supplying the Seoul market and offsetting upward pressure on the rate. Chip stocks had fallen for eight straight sessions on concerns about AI profitability, which it said encourages foreign investors to pull money out and puts upward pressure on the rate. It said rising oil prices, political instability in France and a worsening war between Ukraine and Russia could also support the dollar. [ 6 ]