Global Bond Yields Surge, Won-Dollar Exchange Rate Rises
The US dollar strengthened against the Korean won on October 2 as bond yields jumped globally. The won-dollar exchange rate rose to 1,361.4 won at 9 a.m., up 3 won from the previous day's closing price of 1,358.4 won.
A surge in long-term government bond yields across major countries, including the US, UK, and France, contributed to the dollar's rise. The US 10-year government bond yield hit 5.34% intraday, its highest since April 2002. The UK 30-year government bond yield reached 6.02%, surpassing 6% for the first time since 1998.
According to Jeong Yong-taek of IBK Securities, the widening rate gap with the US has accelerated since late August. He predicts that if external factors continue to deteriorate, the won-dollar exchange rate could climb back to the mid-to-high 1,400-won range by the end of the year or next year.