The USD-KRW exchange rate plunged to the early 1,440 won range during intraday trading on May 29, driven by SK Hynix's dollar sales and the release of export company negotiation volumes as the month-end approached. As of 1:53 PM in the Seoul foreign exchange market, the USD-KRW rate traded at 1,444.80 won, down 17.70 won from the previous day's Seoul market close of 1,462.50 won. The sharp decline swept the exchange rate lower amid increased dollar supply from corporate sources.
USD-KRW Reaches Lowest Level Since May 6
The USD-KRW opened lower at 1,455.00 won on May 29. The exchange rate hit an upper limit of 1,457.80 won at around 9:17 AM before widening its decline as large volumes of export company negotiation orders flowed into the market. The USD-KRW lowered its bottom to 1,442.60 won at around 1:43 PM, marking the lowest level since the May 6 low of 1,439.60 won. This represented a decline of nearly 20 won from the previous day's Seoul market close. The dollar index also plunged during the trading session, contributing to the won's strength.
Foreign Investors Sell Over 55,000 Dollar Futures Contracts
Foreign investors net sold more than 55,000 dollar futures contracts on May 29 in the currency futures market, marking the second consecutive day of large-scale dollar futures selling. A foreign exchange dealer at a commercial bank stated, "Negotiation volumes continue to come out in large quantities, making it impossible to take long positions. It appears the rate was pushed down further in an instant once the 1,450 won level was broken."
Circuit Breakers Triggered in Korean Stock Markets
Circuit breakers were activated in both the Korea Exchange main board and KOSDAQ markets on May 29. After the circuit breaker release, the KOSPI plunged more than 12% at one point amid panic selling.
BOK Governor Maintains Rate Hike Stance
Bank of Korea Governor Shin Hyun-song stated during a business report to the National Assembly's Finance and Economy Planning Committee on May 29 that maintaining a rate hike stance to curb core inflation growth is rational. Market participants are awaiting comments from Federal Reserve Chair Kevin Warsh following the Federal Open Market Committee (FOMC) regular meeting scheduled for the evening of May 29. At the same time, the dollar index fell to 101.288. The USD-JPY rate recorded 163.274 yen, down 0.326 yen, while the EUR-USD rate recorded 1.13800 dollars, up 0.00131 dollars. The JPY-KRW cross rate stood at 884.10 won per 100 yen, and the CNY-KRW rate was 213.40 won. The offshore USD-CNY (CNH) rate rose to 6.7731 yuan.
FAQ
What caused the USD-KRW exchange rate to fall sharply on May 29?
The USD-KRW exchange rate fell sharply on May 29 due to SK Hynix's dollar sales and the release of large volumes of export company negotiation orders as the month-end approached. The exchange rate traded at 1,444.80 won as of 1:53 PM, down 17.70 won from the previous day's close of 1,462.50 won.
What was the lowest level reached by USD-KRW during trading on May 29?
The USD-KRW lowered its bottom to 1,442.60 won at around 1:43 PM on May 29, marking the lowest level since the May 6 low of 1,439.60 won. This represented a decline of nearly 20 won from the previous day's Seoul market close.
What did Bank of Korea Governor Shin Hyun-song say about monetary policy on May 29?
Bank of Korea Governor Shin Hyun-song stated during a business report to the National Assembly's Finance and Economy Planning Committee on May 29 that maintaining a rate hike stance to curb core inflation growth is rational.
