Rate closes above 1,500 won for 30th consecutive session

The won-dollar exchange rate is displayed on a board at Hana Bank's dealing room in Jung-gu, Seoul, on Monday. [Yonhap]
The won-dollar exchange rate is displayed on a board at Hana Bank's dealing room in Jung-gu, Seoul, on Monday. [Yonhap]

By Kim Byeo-ri, The Herald Business

The won-dollar exchange rate closed the weekly session at its highest level since the global financial crisis, as heavy net selling of domestic shares by foreign investors weighed on the won.

The won ended Monday's session at 1,545.2 won per dollar in the Seoul foreign exchange market, up 13.2 won from the previous trading day. That is the highest weekly closing level since March 9, 2009 — during the global financial crisis — when the rate stood at 1,549 won. The rate has now closed above 1,500 won for 30 consecutive sessions since May 15.

The won opened the session at 1,536.5 won, up 4.5 won, before extending gains. It climbed as high as 1,545.7 won around 1:22 p.m. The rate appeared to ease gradually in the hour before the close, only to surge sharply again in the final minutes of trading.

The primary driver of the won's decline was a surge in net selling by foreign investors on the Kospi. Net selling refers to selling more shares than were purchased. Foreign investors net sold approximately 7.7 trillion won ($4.99 billion) worth of shares on Monday — their seventh consecutive session of net selling.

News that OpenAI, the developer of ChatGPT, is considering delaying its initial public offering to next year dampened sentiment toward technology stocks, accelerating the outflow of foreign capital from the domestic market.

The Nasdaq, heavily weighted toward technology stocks, fell 0.24 percent on Friday. The Kospi closed down 0.20 percent at 8,394.65.

Rising tensions in the Middle East over the weekend also pushed the rate higher. Although the United States and Iran agreed to halt armed conflict over the Strait of Hormuz and resume negotiations, markets remain wary that tensions in the region could flare up again.

Estimated intervention by currency authorities and dollar sales by exporters ahead of the half-year end provided some downward pressure, but upward forces proved stronger.

The US Dollar Index, which measures the dollar against a basket of six major currencies, slipped 0.13 to 101.275.


kimstar@heraldcorp.com