- The won’s value rose 4.27% against the dollar in July, marking the biggest appreciation among G20 currencies.
- Expectations that $26.5 billion raised through the SK Hynix ADR listing would be released into the market helped drive won strength.
- Hanwha Ocean’s forward dollar sales and a slowdown in foreigners’ net stock selling also contributed to the drop in the dollar-won exchange rate.
Forecast Trend Report by Period
Won gains 4.27% against dollar in July, breaking below 1,480 per dollar
The South Korean won has posted the strongest gain among major currencies this month after the dollar-won exchange rate fell into the 1,470s in July. The move reflects expectations that funds raised through SK Hynix Inc.’s Nasdaq listing of American depositary receipts on July 10 will be released into the market in stages. The won had slumped to its weakest level since 2009 during the global financial crisis, but has since rebounded sharply and appears to be settling back into the 1,400s.
According to the Seoul foreign-exchange market, the dollar-won rate stood at 1,478.5 as of 3:30 p.m. on July 17, down 1.9 won from the previous day. That was the lowest level since May 11, when it closed at 1,472.4. In later trading, however, the dollar rebounded as tensions in the Middle East intensified, with the session ending at 1,486.0 at 6 a.m. on July 18, up 7.5 won.
The dollar-won rate has fallen 70.9 won from the end of last month, when daytime trading closed at 1,549.4. Compared with monthly moves, that was the biggest decline since November 2022, when the rate dropped 105.5 won from the end of the previous month.
The won’s gain in July was the largest among Group of 20 currencies. Data from the financial investment industry showed the won had risen 4.27% against the dollar from the end of last month. That topped export competitors including Japan at 0.08%, Taiwan at -1.80% and Hong Kong at 0.04%, and marked the biggest advance in the G20. The move was about three times the British pound’s 1.45% gain, the second-largest. The dollar index, which tracks the greenback against six major currencies, fell 0.4%. The euro rose 0.15%, the Russian ruble gained 0.12% and the Swiss franc added 0.04% against the dollar.
Expectations that SK Hynix’s $26.5 billion ADR fundraising would be paid in on July 19 helped lift the won, as the market anticipated that a large amount of dollar liquidity would be released in stages. Market participants also cited Hanwha Ocean Co.’s forward dollar sales. The shipbuilder had been the only major shipyard without a currency-hedging strategy against exchange-rate swings. A slowdown in foreigners’ heavy net selling of local stocks, another factor that had weighed on the won, also supported the currency.
Oh Jung-min, Hankyung.com reporter, blooming@hankyung.com
