Dollar-Won, slightly widens gains on possibility of Fed rate hike…Closes at 1,517.40 won

Dollar-Won, slightly widens gains on possibility of Fed rate hike…Closes at 1,517.40 won

The dollar-won exchange rate closed around 1,517 won, showing a rebound after falling during the night.

The won, which had been reflecting expectations for an end to the US-Iran conflict, generally showed a 'strong start, weak finish' trend after Federal Reserve (Fed) Governor Christopher Waller opened up the possibility of future interest rate hikes.

At 2 AM KST on the 23rd, the dollar-won exchange rate closed at 1,517.40 won, up 11.30 won from the previous day's closing price in the Seoul foreign exchange market.

Compared to the closing price of 1,517.20 won during the main trading hours (9 AM to 3:30 PM) of this session, it rose by 0.20 won.

The dollar-won exchange rate, which entered the New York market at around 1,517 won, narrowed its gains amid expectations of a US-Iran truce agreement.

Iran's state news agency IRNA reported that Pakistan's Chief of Army Staff, Asim Munir, was heading to Iran.

General Munir is considered a 'key man' who mediated the US-Iran truce negotiations, and his movement raised the possibility that a truce agreement was imminent.

Saudi Arabian broadcaster Al Arabiya reported that a final draft related to the US-Iran truce, being worked on with Pakistan's mediation, was expected to be announced within hours. Reuters also reported that Qatar had sent a delegation to support the truce agreement.

The dollar also fell to 1,512.00 won during the session, coinciding with a drop in international oil prices.

It was Fed Governor Waller who turned the direction of the dollar-won.

Waller stated today, "I will support removing the phrase 'easing bias' from the policy statement," adding, "This is to make it clear that a future rate cut is no more likely than a rate hike."

Additionally, with the University of Michigan's survey results showing a rise in long-term inflation expectations, the dollar came under upward pressure, coupled with rising US Treasury yields.

According to the University of Michigan, the 5-10 year long-term inflation expectation for May was 3.9%. This was 0.4 percentage points higher than the previous month.

According to CME FedWatch, as of approximately 2:07 AM, the federal funds rate (FFR) futures market reflects a 68.1% probability of a policy rate hike within the year.

Based on these factors, the dollar-won exchange rate also rose to 1,518.00 won during the session.

Around 2:27 AM, the dollar-yen exchange rate traded at 159.150 yen, and the euro-dollar exchange rate traded at 1.16110 dollars. The offshore dollar-yuan exchange rate moved at 6.7953 yuan.

The yen-won cross rate was 953.20 won per 100 yen, and the offshore yuan-won exchange rate traded at 223.19 won.

For the entire day, the dollar-won exchange rate's intraday high was 1,519.50 won, and the low was 1,504.70 won. The fluctuation range was 14.80 won.

Including night trading, the total spot foreign exchange trading volume, combining Seoul Money Brokerage and Korea Money Brokerage, was 21.84 billion dollars.