Against a backdrop of FRB rate hikes and higher crude oil prices, the dollar has strengthened and Asian currencies have generally come under pressure, while the South Korean won weakened for 7 consecutive days and moved closer to ¥1,400 per dollar.
In the Seoul foreign exchange market on the 21st, the dollar opened at ¥1,387.30 and ended trading at ¥1,381.00 at 3:30 p.m., down ¥2.30 from the previous business day. More recently, the dollar rose from ¥1,336.10 to ¥1,383.30 between the 9th and 18th, marking 7 consecutive business days of dollar strength.
The backdrop was the FRB's 0.25 percentage-point rate hike on the 16th, from an annual rate of 3.75%–4.00%, along with its indication that further hikes were possible. The dollar index has remained around 100.0. Higher crude oil prices and rising US Treasury yields have also increased demand for the dollar, putting broad pressure on the currencies of major Asian countries.
The won fell 3.4% over the same period, while the effects of a weaker yen and higher crude oil prices compounded its decline, highlighting its relative weakness during periods of dollar strength. ECOS data has also prompted analysis that the won's movement was particularly pronounced compared with other currencies.
There is growing speculation that the tug-of-war around the ¥1,400 level will continue, with further volatility expected depending on crude oil price trends, the yen's trajectory and the FRB's future monetary policy.