[Overnight Close] Dollar-Won Drops 22.20 Won Despite U.S. PPI and Retail Sales Data

# Dollar-Won Exchange Rate Ends Flat in Overnight Trading Near 1,390 KRW (New York, Yonhap News) Jin Jeong-ho, Yonhap Infomax Correspondent – The dollar-to-won exchange rate showed minimal movement in overnight trading, closing flat at the upper 1,390 KRW range. As of 2:00 a.m. on May 16 (Korean time), the dollar-won exchange rate settled at 1,398.00 KRW, down 22.20 KRW from the previous day’s close in the Seoul foreign exchange market. Compared to the week’s intra-session closing price of 1,394.50 KRW (9:00 a.m.–3:30 p.m.), the exchange rate increased by 3.50 KRW. After the Seoul market closed, the dollar-won rate mirrored the dollar's weaker trend in London trading, hitting an intraday low of 1,390 KRW. However, as the U.S. Dollar Index reduced its intraday losses, the dollar-won exchange rate regained some of its earlier decline. # U.S. Data Reflects Volatility in Dollar Performance The U.S. April Producer Price Index (PPI) dropped 0.5% month-on-month, below market expectations, impacting the dollar's value negatively during the session. Meanwhile, U.S. April retail sales rose modestly but showed a notable slowdown compared to previous months, raising investor caution. Thierry Wizman, Global FX and Interest Rate Strategist at Macquarie, remarked, “This is not merely a tariff issue; there are rising concerns over the fundamental weakness of American consumer sentiment.” The U.S. Dollar Index later stabilized, hovering near equilibrium with limited volatility by session’s end. # Federal Reserve Chair Powell's Remarks Have Limited Market Effect Federal Reserve Chair Jerome Powell delivered a speech during the session but did not significantly influence the dollar market. Powell stated, “We may be entering an era of more frequent and potentially more sustained supply shocks, which could pose challenging risks for both the economy and central bank policy.” While Powell did not directly address former President Donald Trump, his remarks subtly pointed to potential long-term yield increases due to tariff policies and economic shifts initiated by the previous administration. # Broader FX Movements and Offshore Trading Metrics By 3:20 a.m., the dollar-yen exchange rate stood at 145.640 JPY, while the euro-dollar rate traded at 1.11780 USD. The offshore dollar-yuan exchange rate was 7.2034 CNY per dollar. The yen-won fiscal exchange rate dropped 1.08% to 957.29 KRW per 100 JPY. Meanwhile, the yuan-won exchange rate decreased 1.70%, closing at 193.54 KRW. # Daily Trading Metrics and Intraday Volatility The dollar-won exchange rate recorded an intraday high of 1,412.10 KRW and a low of 1,390.00 KRW, showcasing an overall trading range of 22.10 KRW. Combined spot foreign exchange trading volume through the Seoul Foreign Exchange Brokerage and Korea Money Brokerage firms totaled 13.89 billion USD in the overnight session. jhjin@yna.co.kr