Dollar-Won Closes at 1,469.30 as US Economic Data Bolsters Rate Cut Expectations

(New York=Yonhap Infomax) Jeong Ho Jin, Yonhap Infomax Correspondent = The dollar-won exchange rate extended its decline in after-hours trading.

Authorities' commitment to stabilizing the foreign exchange market remained evident through the close, while weaker US economic data supporting the case for interest rate cuts weighed on the dollar.

At 02:00 KST on the 26th, the dollar-won rate ended at 1,469.30, down 7.80 won from the previous Seoul session close.

Compared to the regular session closing price of 1,472.40 won (from 09:00 to 15:30), the rate fell by 3.10 won.

During regular trading, the dollar-won rate trended lower on the back of authorities' stabilization efforts and exporter dollar sales. In the London session, the rate dropped further to the 1,464 won level. The sharp recent rise in the exchange rate prompted profit-taking, compounded by signs of official intervention.

In New York, key US economic indicators further strengthened the case for rate cuts.

The US Producer Price Index (PPI) for September rose 0.3% month-on-month on a seasonally adjusted basis, matching market expectations.

US retail sales for September increased 0.2% from the previous month, below the 0.4% forecast. Compared to August's 0.6% gain, the slowdown in consumption became more pronounced in September.

Moderate inflation and weakening consumption provide the Federal Reserve with more room to cut rates. As rate cut expectations intensified, US Treasury yields declined, supporting a stronger won.

Scott Helfstein, Head of Investment Strategy at Global X, said, "Producer prices remained stable and retail sales showed a mild slowdown in consumption," adding, "A December rate cut is now under serious consideration."

As of 02:59, the dollar-yen rate stood at 155.900 yen, while the euro-dollar rate was at 1.15819. The offshore dollar-yuan rate traded at 7.0810 yuan.

The yen-won cross rate was 944.33 won per 100 yen, and the yuan-won rate was 207.92 won.

During the session, the dollar-won rate reached a high of 1,477.00 and a low of 1,464.50, marking a trading range of 12.50 won.

Total spot FX trading volume, combining Seoul Foreign Exchange Brokerage and Korea Money Brokerage, was tallied at $13.689 billion through after-hours trading.

jhjin@yna.co.kr

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