Whereas the Greenback Index (greenback worth) rose 3.1% between Sept. 16 and Nov. 11, the won-dollar trade charge elevated 6.1% (gained depreciation) throughout the identical interval, displaying a gained depreciation twice as a lot because the greenback’s worth achieve. The Greenback Index is an indicator that reveals the worth of the greenback towards six main currencies, together with the euro.
Hyundai Financial Analysis Institute said in its report titled “Rising Chance of International Change Market Equilibrium Deviation” on Nov. 16 that “amid the current sharp rise in trade charges, home international trade market instability is increasing, with trade charge volatility additionally displaying excessive ranges in comparison with main nations.”
In response to the report, the won-dollar trade charge fell to 1,378.9 gained on Sept. 16 earlier than rising to 1,463.3 gained on Nov. 11 as a consequence of greenback energy. Throughout the identical interval, whereas the Greenback Index rose roughly 3.1% from 96.6 to 99.7, the won-dollar trade charge jumped 6.1%, double that quantity. The won-dollar trade charge fluctuation was larger than the yen-dollar (4.6%), dollar-euro (-1.7%), and yuan-dollar (0.1%) charges. This means that gained depreciation was notably pronounced.
Hyundai Financial Analysis Institute recognized U.S. tariff coverage dangers and U.S. financial coverage uncertainty as components growing current trade charge volatility. The institute defined that amid continued U.S. tariff coverage uncertainty, stress for gained weak point elevated as Korea’s funding methodology within the U.S. was finalized solely on the finish of final month, and uncertainty over the Federal Reserve’s rate of interest lower path additionally heightened trade charge volatility. Moreover, considerations over greenback liquidity scarcity in short-term funding markets, synchronization with the yen which confirmed weak point as a consequence of expectations of fiscal enlargement, and protected asset choice sentiment that started with synthetic intelligence (AI) bubble considerations additionally influenced trade charge will increase. The truth that the KOSPI rose roughly 76% in comparison with the start of the yr, resulting in profit-taking gross sales by international traders, might additionally gas gained weak point.
