Won-Dollar Rate Returns to 1,490 Range as U.S. CPI Lifts Dollar

The won-dollar exchange rate closed at 1,490.6 won on May 13 in the Seoul foreign exchange market, up 0.7 won from the previous session. Based on the daytime trading close, it was the highest level since 1,504.2 won on the 7th of last month, just before the U.S. and Iran declared a ceasefire. The rate had fallen to 1,454.0 won after the outbreak of the U.S.-Iran war on the 7th, then rose for four straight trading days from the 8th. The move followed U.S. April consumer price index data released on the 12th local time. CPI rose 3.8% from a year earlier, above the market forecast of 3.7%, and was reported as the fastest increase in three years. As expectations for a Federal Reserve rate cut this year weakened, the dollar strengthened and the won lost relative value. Min Kyung-won, a researcher at Woori Bank, said inflation had removed the likelihood of a Fed rate cut this year, leading to dollar strength. Source: rss.donga.com