The Korean won appreciated 4.27% against the dollar in July, recording the highest appreciation rate among G20 currencies, according to data from the Seoul foreign exchange market on the 19th. The won-dollar exchange rate fell to 1478.5 won on the 17th, the lowest level since May 11 (1472.4 won). Market expectations that the $26.5 billion (approximately 40 trillion won) raised through SK Hynix's American Depositary Receipt (ADR) listing on Nasdaq on the 10th would be sequentially released into the market contributed to the won's strength.
Won-Dollar Exchange Rate Drops to Two-Month Low
The won-dollar exchange rate (as of 3:30 PM) closed daytime trading at 1478.5 won on the 17th, down 1.9 won (won appreciation) from the previous day. This marked the lowest level since May 11 (1472.4 won), approximately two months prior. However, in subsequent trading, the rate rebounded 7.5 won to 1486.0 won by 6 AM on the 18th amid rising Middle East tensions.
The won-dollar exchange rate fell 70.9 won compared to the end of last month's weekly closing price (1549.4 won). When compared on a monthly basis, this represented the largest decline since November 2022 (105.5 won drop from the previous month-end), a period of three years and eight months.
Korean Won Leads G20 Currency Appreciation in July
The Korean won's appreciation against the dollar reached 4.27% compared to the previous month-end, the largest among G20 currencies. This surpassed export competitor nations including Japan (0.08%), Taiwan (-1.80%), and Hong Kong (0.04%) during the same period. The won's appreciation was approximately three times that of the second-place British pound (1.45%).
The dollar index, which represents the dollar's value against six major currencies, fell 0.4%. Other currencies showing modest strength against the dollar included the European euro (0.15%), Russian ruble (0.12%), and Swiss franc (0.04%).
SK Hynix ADR Funding and Reduced Foreign Selling Support Won
Market expectations that the $26.5 billion (approximately 40 trillion won) raised through SK Hynix's ADR listing would be sequentially released into the market drove the won's appreciation. Hanwha Ocean, the only major shipbuilder that had not employed currency hedging strategies, began selling forward exchange contracts, which analysts identified as another contributing factor.
The subsiding of large-scale net stock selling by foreigners, which had previously pressured the won's value, also contributed to the currency's strength.
FAQ
What was the Korean won's appreciation rate against the dollar in July?
The Korean won appreciated 4.27% against the dollar in July compared to the previous month-end, recording the highest appreciation rate among G20 currencies.
What exchange rate level did the won-dollar reach on the 17th?
The won-dollar exchange rate fell to 1478.5 won on the 17th at 3:30 PM, marking the lowest level since May 11 (1472.4 won).
How did SK Hynix's ADR listing affect the Korean won?
Market expectations that the $26.5 billion (approximately 40 trillion won) raised through SK Hynix's ADR listing on Nasdaq on the 10th would be sequentially released into the market contributed to the won's appreciation against the dollar.
