Dollar Rally Pushes Won Near 1,550, Highest Since Global Financial Crisis

Won Nears Lowest Level Since Financial Crisis

The won-dollar exchange rate surged to its highest level since the global financial crisis, moving closer to 1,550 won per dollar. Concerns over US inflation and expectations for continued Federal Reserve tightening are fueling dollar strength.

In Seoul's foreign-exchange market on June 26, the won traded at 1,547.5 per dollar as of 9:50 a.m., up 4.8 won from the previous daytime session close of 1,542.7 won at 3:30 p.m. The exchange rate opened at 1,547.3 won, up 4.6 won, and extended its rise toward 1,550.

The won closed the previous daytime session at 1,542.7 per dollar, up 0.9 won, marking a second straight daytime close in the 1,540 won range. That was the highest closing level since March 9, 2009, when the exchange rate stood at 1,549.0 won. The rate has risen each day since June 22. Aside from a 0.1 won decline on June 19, it has climbed continuously since June 16.

Dollar strength has persisted as worries about US inflation and the Fed's policy-tightening outlook have grown. The US personal consumption expenditures price index for May, released overnight, rose 4.1% from a year earlier, the biggest increase since April 2023. The figure matched market expectations, but still showed strong price pressure and reinforced expectations for higher Fed rates.

Lee Min-hyuk, a researcher at KB Kookmin Bank, said offshore dollar adjustments and lower US short-term interest rates are factors that could weigh on the pair. But a rebound in oil prices and yen weakness are limiting any turn toward won strength, while demand for dollars tied to foreign investors' net stock selling remains in place.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com