The USD-KRW exchange rate fell to 1,466.60 won as of 3:30 PM on July 23 in the Seoul foreign exchange market, down 0.20 won from the previous trading day's close of 1,466.80 won, marking the lowest closing level since May 7. The decline occurred despite overnight oil price rebounds that intensified risk-aversion sentiment across markets, as dollar-selling pressure from export companies dominated trading dynamics. The rate dropped 7.60 won from the 6 AM New York close of 1,474.20 won, with foreign investors net selling 3.268 trillion won worth of stocks in the securities market amid Middle East military escalation concerns.
USD-KRW Falls to 1,466.60 Won on Export Dollar Selling
The USD-KRW exchange rate opened at 1,475.50 won on July 23. Oil price increases pushed the rate to an intraday high of 1,476.30 won early in the session amid military conflict escalation in the Middle East. The rate subsequently declined sharply as export companies released negotiation volumes approaching month-end and ahead of the weekend. The intraday low reached 1,462.20 won, with a trading range of 14.10 won. The market average rate (MAR) was set at 1,466.30 won. Spot foreign exchange trading volume totaled $10.235 billion across Seoul Foreign Exchange Brokerage and Korea Money Brokerage combined.
Export Company Dollar Sales Drive Intraday Decline
A commercial bank foreign exchange dealer stated, "We continue to be pressed down due to supply and demand. It is observed that a large volume of export company negotiation amounts have been released from specific houses." The dealer added, "Dollar selling has continued recently, making further increases difficult." Risk-off sentiment from Middle East instability negatively impacted domestic stock markets, with the KOSPI falling 5.72% to 6,690.62 and the KOSDAQ dropping 5.32% to 748.22. The dollar index and USD-JPY exchange rate both turned downward, adding downward pressure on USD-KRW.
Japanese Yen Weakness and Won Strength Divergence Concerns
Japanese Finance Minister Katayama Sachiko stated at a press conference on the morning of July 23, "The government is prepared to take firm action in the foreign exchange market," making a verbal intervention statement. Following this remark, the USD-JPY rate, which had been threatening the 164 yen level, declined to the mid-to-late 163 yen range. A securities firm dealer commented, "Won strength is progressing relative to other currencies. Some view the won as synchronizing with the yuan, but in reality it will be somewhat difficult to go against the yen's trend." The dealer explained, "From a fundamental perspective, I heard that the degree of competition between South Korea and Japan in terms of exports is significantly higher than with China. Considering this, it is difficult to conclude that won strength is unconditionally good."
Market Participants Anticipate FOMC Meeting
Market participants are awaiting the Federal Open Market Committee (FOMC) meeting scheduled for July 28-29 (local time). West Texas Intermediate (WTI) crude oil for September delivery, which had surged to the $93 per barrel range, lowered its price to the $90 per barrel range in the afternoon. In the currency futures market, foreigners net sold approximately 38,000 dollar futures contracts, continuing large-scale selling flow from the previous day. The People's Bank of China (PBOC) set the USD-CNY trading reference rate at 6.7939 yuan, up 0.0033 yuan (0.05%) from the previous session. US July S&P Global Purchasing Managers' Index (PMI) and June new home sales data are scheduled for release in the evening.
FAQ
What was the USD-KRW exchange rate on July 23?
The USD-KRW exchange rate closed at 1,466.60 won as of 3:30 PM on July 23 in the Seoul foreign exchange market, down 0.20 won from the previous trading day's close of 1,466.80 won. This represented the lowest closing level since May 7. The rate opened at 1,475.50 won and reached an intraday high of 1,476.30 won before declining to a low of 1,462.20 won.
Why did the USD-KRW exchange rate decline on July 23?
The USD-KRW exchange rate declined on July 23 primarily due to dollar-selling pressure from export companies releasing negotiation volumes as month-end approached and ahead of the weekend. This selling pressure dominated trading dynamics despite overnight oil price rebounds and Middle East tensions that intensified risk-aversion sentiment. The dollar index and USD-JPY exchange rate also turned downward, adding further downward pressure on USD-KRW.
What did Japanese Finance Minister Katayama Sachiko say about the foreign exchange market on July 23?
Japanese Finance Minister Katayama Sachiko stated at a press conference on the morning of July 23, "The government is prepared to take firm action in the foreign exchange market." Following this verbal intervention statement, the USD-JPY rate, which had been threatening the 164 yen level, declined to the mid-to-late 163 yen range.
