Won Strengthens Against Dollar After Fed Keeps Interest Rates Unchanged

The South Korean won strengthened against the US dollar on July 29 after the Federal Reserve's decision to keep interest rates unchanged. The won-dollar exchange rate was 1,442.5 won as of 9 a.m., down 4.2 won from the prior transaction day's weekly closing price (1,446.7 won).

The Fed kept its benchmark rate at 3.5% to 3.75%, citing inflation as the primary goal at 2%. Fed Chair Kevin Warsh emphasized that there is only one target for inflation, and some household, corporations, and market experts may have a different impression.

Kim Yumi, a researcher at Kiwoom Securities, said the won's direction will be driven by domestic growth momentum and supply-demand conditions. Recent strength in semiconductor exports, inflows of foreign funds, and exchange demand from corporations are improving the domestic foreign exchange market.