Woori Bank predicted on Friday that the dollar-won exchange rate could surpass 1,450 won. This is because President Donald Trump has again removed the tariff pressure card.
Woori Bank analyst Min Kyung Won stated, “As Trump increased the pressure to raise tariffs once again, the New York stock market responded overnight with panic selling due to trade dispute uncertainties. The South Korean stock market is also expected to weaken the Korean won as foreign capital continues to leave.”
He added that settlement demand and securities firms’ dollar purchases for overseas stock investment funds directly catalyze the rising exchange rate.
On Thursday, Trump announced plans to impose a 25% blanket tariff on Canada and Mexico, as scheduled for March 4, and an additional 10% tariff on China on the same day.
Min assessed that if the Chinese yuan and Singapore dollar widen their losses early in the Asian stock market, it could stimulate offshore buying sentiment, likely temporarily causing the dollar-won exchange rate to exceed 1,450 won.
However, he noted that the authorities’ measured approach and the National Pension Service’s strategic foreign exchange hedge would likely put psychological pressure on further exchange rate increases.
He further explained that while foreign net selling in the stock market and domestic buying will initially widen gains, negotiations from export companies and cautious adjustments by authorities will likely curb the increase, resulting in fluctuations in the upper 1,440 won range.