USD-KRW exchange rate remains around 1,445 won... European economic slowdown becomes a variable

The USD-KRW exchange rate remained range-bound in the New York foreign exchange market in the early hours of January 3, closing at around 1445 KRW. Influenced by global economic indicators and major currency trends, the exchange rate failed to show a clear direction and fluctuated within a limited range.

On that day, the USD-KRW rate closed at 1444.70 KRW, up 5.70 KRW from the Seoul foreign exchange market close of 1438.90 KRW, and also increased by 2.90 KRW compared to the weekly trading close of 1441.80 KRW. After the opening of the New York market, the US dollar strengthened against major currencies, with the rate rising to as high as 1447.40 KRW.

This increase was affected by weak economic indicators from Europe. The S&P Global and Hamburg Commercial Bank released the Eurozone December Manufacturing Purchasing Managers’ Index (PMI) at 48.8. This data was below the expansion-contraction threshold of 50 and below market expectations of 49.2, marking the lowest level in nine months. This situation led to a weakening of the euro, relatively boosting the value of the US dollar.

However, the yen then turned strong, and the USD-KRW exchange rate retraced some gains, fluctuating slightly between 1444 and 1445 KRW. With limited volatility in the exchange rate, the market generally remained cautious. Joseph Darrie, Managing Partner at Tickmill Asset Management, stated, “Given that major US economic indicators will be released next week, it is too early to judge the dollar’s direction or interest rate trends,” and expects the market to maintain a cautious stance.

On that day, the total spot trading volume across Seoul foreign exchange intermediaries and Korean capital intermediaries reached $9.163 billion. The intra-day fluctuation of the USD-KRW rate ranged from a low of 1439.00 KRW to a high of 1447.40 KRW, maintaining a total range of 8.40 KRW. Additionally, in major currency rates, the USD-JPY was at 156.740 yen, the EUR-USD at 1.17358 dollars, and the offshore USD-CNY rate at 6.9677 yuan.

Currently, due to the dense schedule of economic indicators related to US inflation, employment, and other data releases at the beginning of the year, the global currency markets are likely to remain cautious overall. Especially with indicators that could influence Federal Reserve interest rate policies, it is expected that future exchange rates will gradually form directional trends based on this information.