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The won/dollar exchange rate rose to the mid-1,480 won range as expectations for a future cut in the US benchmark interest rate diminished.
As of 9:06 AM on the 30th in the Seoul foreign exchange market, the won-dollar exchange rate was 1,485.7 won, up 6.7 won from the previous day's weekly closing price (as of 3:30 PM).
The exchange rate started at 1,486.5 won, up 7.5 won, and has been fluctuating around a similar level.
Although the US Federal Reserve (Fed) froze the benchmark interest rate at 3.50-3.75% annually at the Federal Open Market Committee (FOMC), its monetary policy decision-making body, the dollar is strengthening as three committee members expressed a minority opinion that blocked expectations for future rate cuts.
These committee members agreed to the rate freeze but opposed including a 'dovish stance' in the statement, which would signal that a rate cut is more likely than a rate hike in the future.
As the Fed's decision was interpreted as a 'hawkish freeze,' the dollar index, which indicates the dollar's value against a basket of six major currencies, rose to the early 99s this morning. It is currently slightly down at 98.821.
The ongoing instability in the Middle East is also a factor in the exchange rate's rise.
US President Donald Trump announced that he would maintain a naval blockade against Iran until a nuclear deal with Iran is reached. Iran has also warned of a strong response, escalating tensions.
The yen/dollar exchange rate also rose, exceeding 160 yen. It rose to 160.460 yen overnight and is currently slightly down at 160.090 yen.
The won/yen arbitrage rate was 927.7 won per 100 yen, up 1.68 won from the previous day's closing price as of 3:30 PM.
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