"1550 Won Broken Again Intraday"... Won-Dollar Exchange Rate Hits Highest Level in 17 Years (Roundup)

[Financial News] The won-dollar exchange rate once again broke above the 1,550-won level intraday. On a closing basis as well, it has climbed to its highest level since March 2009, during the Global Financial Crisis (GFC), marking a peak not seen in about 17 years and three months. Despite efforts by the foreign exchange authorities to stabilize the market, the won's weakness has not eased. With dollar strength and foreign capital outflows combining, concerns are growing that the upper end of the exchange-rate range could open further.
On the 30th, the won-dollar exchange rate in the Seoul foreign exchange market closed daytime trading at 1,549.4 won, up 4.2 won from the previous trading day. The rate opened at 1,543.1 won early in the session, but quickly turned higher after the market opened and at one point reached 1,550.4 won intraday.
The move above 1,550 won intraday came 16 trading days after the 8th, when the intraday high reached 1,555.2 won. On a daytime closing basis, it was the highest level since March 6, 2009, when it stood at 1,550.0 won, and it broke the previous post-crisis high set the day before.
Through the 30th, the won-dollar exchange rate had moved in the 1,500-won range for 31 consecutive trading days. The average exchange rate for the second quarter of this year was also tallied at 1,501.6 won, the highest quarterly average since the IMF Crisis.
Market participants say a combination of dollar strength, net selling of domestic stocks by foreign investors, and a weaker yen has intensified pressure on the Korean won.
Shifts in the Federal Reserve System (the Fed)'s monetary policy outlook are also fueling dollar strength. As expectations for rate cuts fade and even the possibility of future rate hikes is being discussed, demand for the dollar remains strong in global markets.
The U.S. Dollar Index (DXY), which measures the dollar's value against six major currencies, stood at 101.327 as of 3:30 p.m. that day. That was up 0.052 points from the same time on the previous trading day.
Foreign investors' continued exit from the domestic stock market is also adding to pressure on the Korean won. On the Korea Exchange Main Board that day, foreign investors net sold about 380 billion won, extending their net selling streak to eight consecutive trading days. The previous day, they posted a record net sale of about 770 billion won.
Analysts say that when foreign investors sell Korean stocks and convert the proceeds into U.S. dollars, it can add to upward pressure on the exchange rate.
A weaker yen is another burden. The USD/JPY exchange rate reached the 162-yen range that day, its highest level in about 39 years since December 1986. As the Japanese yen weakened, the Korean won also moved in tandem, and pressure on Asian currencies more broadly appears to be increasing.
Market watchers believe the won-dollar exchange rate is more likely to fluctuate at elevated levels for the time being rather than stabilize quickly. Some also say that if the 1,550-won level becomes firmly established and additional upward pressure builds, the 1,600-won mark should be kept in view.
Even though the foreign exchange authorities stepped in with large-scale dollar sales to stabilize the market, the won's weakness has not been easily contained.
According to 'Net Transactions by the Foreign Exchange Authorities in the First Quarter of 2026' released by the Bank of Korea on the day, the authorities net sold $13.628 billion in the first quarter of this year to stabilize the foreign exchange market. A negative net transaction amount means the authorities supplied dollars to the market and bought won, easing upward pressure on the exchange rate.
The first-quarter net selling was the fourth-largest on record, and the foreign exchange authorities have maintained a net selling stance for six consecutive quarters since the fourth quarter of 2024. Cumulative net selling over that period has reached about $45.352 billion.
imne@fnnews.com Hong Ye-ji Reporter