"Exchange Rate Drops by 5.9 Won Due to US-South Korea Currency Talks Concerns… Lowest in 6.5 Months"

# South Korean Won Gains Strength Amid U.S.-Korea Currency Negotiations SEOUL—The South Korean won experienced notable gains against the U.S. dollar on Monday, as market sentiment was influenced by caution surrounding currency negotiations between Seoul and Washington. On the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,381.3 won per dollar at 3:30 p.m., reflecting a decline of 5.9 won from the previous session's close. This resulted in the lowest end-of-day rate since November 5 of last year, when it closed at 1,378.6 won. The exchange rate opened at 1,377.0 won, down 10.2 won from the previous session, and briefly fell to as low as 1,373.0 won in early trading. # U.S. Pressure for Won Appreciation Influences Market The South Korean currency appreciated amid speculation that the U.S. might push for a revaluation of the won during bilateral talks. Reports surfaced post-market hours on Friday indicating that the U.S. had asked South Korea to allow the won to appreciate, plunging the exchange rate to 1,368.9 won at its lowest. Responding to these reports, South Korea’s Ministry of Economy and Finance clarified that discussions with the U.S. included sharing mutual understanding of foreign exchange market principles and policies, with no concrete agreements reached. However, this statement did little to ease market reactions. The overnight trading session closed at 1,371.8 won, marking the weakest closing level for the won since October 18 of last year, when it ended at 1,369.3 won. # U.S.-Japan Finance Minister Talks Impact Market Dynamics Before Monday’s market open, news of a meeting between the U.S. and Japanese finance ministers helped temper the pace of the won’s appreciation. On July 21 (local time in Canada), the two officials convened on the sidelines of the G7 finance ministers’ summit to discuss trade and exchange rate policies. Although speculation arose that the U.S. might request Japan to strengthen the yen, both parties clarified that no specific yen-dollar exchange rate levels were discussed. They also agreed that the current yen-dollar rate reflects market fundamentals and that exchange rates should be determined by the market. Nevertheless, in broader Asian currency markets, there remains a prevailing sentiment that U.S. policymakers are advocating for stronger regional currencies. # Domestic Market Dynamics and Dollar Index Foreign selling in South Korean equities added a counterbalance, limiting the won’s gains. The benchmark KOSPI closed down 31.91 points, or 1.22%, at 2,593.67, as foreign investors recorded net sales of approximately 483.2 billion won ($376.6 million) on the main stock exchange. Meanwhile, the U.S. dollar index—which measures the greenback against a basket of six major currencies—rose slightly by 0.07% to 99.547, staying below the psychologically significant 100 level. # Yen-Won Exchange Rate and Yen-Dollar Performance As of 3:30 p.m. Monday, the won-yen cross rate stood at 964.49 won per 100 yen, down 1.73 won from the previous day’s close of 966.22 won. Meanwhile, the yen-dollar exchange rate fell by 0.24%, landing at 143.211 yen per dollar. This currency interplay underscores ongoing volatility in the foreign exchange markets as investors closely monitor U.S.-Asia policy discussions.