Won Gains 0.67% as Exporters Sell Dollars Before Holiday
The South Korean won strengthened to 1,371 per dollar as major firms sold currency ahead of Chuseok, aided by falling oil prices.
Key points
- The won strengthened 0.67% to 1,371 per dollar as exporters sold currency ahead of the Chuseok holiday.
- Brent crude futures fell 3.4% to $100.34, supporting risk assets like the Nasdaq which hit a record high.
- Woori Bank analysts say increased dollar supply from exporters will help lower the exchange rate despite global dollar strength.
The won-dollar exchange rate fell 9.3 won to 1,371 on the morning of the 22nd. This 0.67% decline marked a clear shift from the previous day's close of 1,381 won.
Chosunbiz reports that major export corporations drove this move by selling dollars ahead of the Chuseok holiday. Traders noted the rate slid into the 1,360-won range shortly after 9 a.m.
Oil price drop boosts global risk appetite
International oil prices fell for three consecutive days as US-Iran dialogue signs emerged. Brent crude futures dropped 3.4% to $100.34 per barrel on the 21st.
Stock markets responded positively to this shift in sentiment. The S&P 500 rose 1.49% while the Nasdaq composite gained 2.26% to hit a record high.
Bankers link dollar sales to risk recovery
Min Kyung-won of Woori Bank stated that recovering risk appetite favors dollar sales by exporters. He expects this increased supply to push the exchange rate lower.
Global dollar strength limits won gains
Global interest rate trends and dollar strength remain headwinds for the won. If dollar buying demand expands, the currency could weaken and the rate could rise.
