Exchange Rate Returns to the 1,500 Won Range Again; Foreign Investors Are Net Sellers of 5 Trillion Won

[Financial News] The won-dollar exchange rate climbed into the 1,500 won range during trading for the first time in about a month.
On the 15th, the won-dollar exchange rate opened at 1,494.2 won in the Seoul Foreign Exchange Market, up 3.2 won from the previous trading day. After 2 p.m., it widened its gains and moved above the 1,500 won level.
It was the first time in about a month that the exchange rate had touched 1,500 won intraday, since April 7.
Based on closing prices, it has been moving higher since closing at 1,454.0 won on the 7th and then reaching 1,491.0 won on the 14th.
The decline in the won was also attributed to foreign investors selling domestic stocks. Foreign investors sold 503.12 billion won worth of shares on the Korea Exchange Main Board at that point. In general, when foreigners sell stocks, the won they receive is expected to be exchanged into dollars, which puts downward pressure on the currency.
Institutions also recorded net selling of 1.2243 trillion won. As a result, a sidecar on program sell orders was triggered again around 1:28 p.m., the first such move in about a month and a half since the 2nd of last month.
In its report, "Trends in International Finance and the Foreign Exchange Market," released on the day, the Bank of Korea (BOK) said the recent won-dollar exchange rate had fallen to the 1,450 won range on expectations of progress in U.S.-Iran ceasefire negotiations and strength in the Japanese yen, but the decline narrowed as those expectations faded and foreigners continued net selling of domestic stocks.
Higher-than-expected U.S. import prices for April also supported dollar strength. The figure rose 1.9% from a month earlier, exceeding both the previous month's 0.9% increase and the market forecast of 1.0%.
Kim Yu-mi, a researcher at KIWOOM Securities, said, "As inflation concerns intensified amid sharp rises in price indicators, the possibility of prolonged tightening by the Federal Reserve System (Fed) came into focus, and the USD strengthened accordingly."
taeil0808@fnnews.com Kim Tae-il Reporter