The USD-KRW exchange rate has edged lower, trading in the early 1,380 KRW (about 1.00 USD) range, as international oil prices and U.S. Treasury yields decline.
As of 9:01 a.m. (Korean time) on Wednesday, the dollar-won exchange rate was trading at 1,382.2 KRW (about 1.00 USD), down 3.9 KRW (about 0.0028 USD) from the previous day’s closing price at 3:30 p.m. (Korean time).
Despite a slight dip due to falling global oil prices and U.S. Treasury yields, the rate remains above the early 1,380 KRW (about 1.00 USD) range. This stability is attributed to strong dollar buying interest, as investors perceive recent declines as excessive.
International oil prices fell for the second consecutive day, with WTI and Brent crude dropping over 3%. Analysts suggest this decline stems from expectations that the U.S. will opt for economic pressure rather than military action against Iran, easing concerns about potential oil supply disruptions.
U.S. Treasury yields also declined for two straight days. Recent economic data revealed a slowdown in both the U.S. housing market and consumer sentiment, contributing to the slight decrease in yields.
The downturn in global oil prices and market interest rates buoyed U.S. stock markets, with all three major indices rising. Consequently, the dollar index has remained relatively stable around 98.9.
However, the USD-KRW exchange rate has only marginally decreased in the early 1,380 KRW (about 1.00 USD) range, despite the broader market trends. Moon Jeong-hee, an economist at KB Kookmin Bank, explains that the 1,382 KRW (about 1.00 USD) level serves as both a strong resistance and support point, coinciding with the 200-week moving average. Moon predicts continued downward pressure on the exchange rate, citing ongoing end-of-month export negotiations (dollar sales), the dollar’s relative weakness in offshore markets, and the won’s current undervaluation compared to currencies like the EUR.