Won-Dollar Exchange Rate Surges on Fed's Hawkish Stance

The won-dollar exchange rate surged 37.4 won in a week, settling at 1,383.3 won as of 3:30 p.m. on the 18th.

This upward trend began on the 10th and extended for seven consecutive trading days, with the rate jumping 34.9 won over four sessions from 1,347.3 won on the 14th to 1,382.2 won on the 17th.

The catalyst behind this climb was the Federal Reserve's monetary policy shift, which included a 0.25 percentage point increase in its benchmark rate to a range of 3.75-4.00%, the first hike in three years and two months since July 2023.

Analysts attribute this decision to concern that the 2% inflation target has not been achieved for more than five and a half years, with 16 out of 18 Fed officials projecting at least one additional rate increase by year-end.