The won-dollar exchange rate moved in a narrow range during early-morning hours on the second day of South Korea's 24-hour foreign exchange market, showing little significant volatility.
The won opened at 1,531 per dollar at 2 a.m. Tuesday and traded without major swings before slipping to the 1,529 range from 4 a.m. onward. It briefly recovered to 1,530.3 around 6 a.m., then dipped to 1,528.9 before climbing again, trading in the 1,529 range as of 7:50 a.m.
The domestic foreign exchange market previously operated only from 9 a.m. to 2 a.m. the following day. The 24-hour expansion brings the 2 a.m.-to-9 a.m. window into the domestic market for the first time.
On Monday, the won opened at 1,527.6 per dollar — up 2 won from the previous session — and rose as high as 1,537.5 during trading before pulling back to close the daytime session at 1,530.3 at 3:30 p.m. During the subsequent overnight session, the rate stayed largely in the low 1,530s through 2 a.m.
Market participants had previously warned that round-the-clock trading could amplify exchange rate volatility in the early-morning hours, with the risk that thin volume could trigger sharp swings if major news broke. The absence of significant international developments appears to have kept volatility in check this time.
However, the low-volume problem was evident. Only 26 transactions were recorded between 2 a.m. and 6 a.m. — just 0.3 percent of the 9,918 trades logged during Monday's regular daytime session from 9 a.m. to 3:30 p.m., and 0.9 percent of the 2,807 trades in the existing overnight session through 2 a.m. that day. The figures suggest that a major development during the early-morning window could still produce outsized volatility.
The dollar index, which measures the greenback against six major currencies, climbed to the 101 range on Monday before giving back its gains and settling in the 100.8 range. It stood at 100.84 as of 6:15 a.m. Tuesday.
The yen continued to weaken. After tumbling to the 160-yen-per-dollar range on Friday, the yen-dollar rate extended its decline on Monday, rising to the 162 range. The won-yen fiscal rate stood at 943.26 won per 100 yen, down 0.26 won from Monday's 3:30 p.m. benchmark.
South Korea's domestic foreign exchange market shifted to 24-hour operations on Monday, expanding from its previous schedule of 9 a.m. to 2 a.m. the following day to a new window running from 6 a.m. Monday through 6 a.m. Saturday. Won-dollar trading is now available every day except weekends and Jan. 1.
kimstar@heraldcorp.com
forest@heraldcorp.com
