Dollar falls below 1380 won on exporter selling

The dollar-won exchange rate experienced a decline, falling below the 1380 won mark on the morning of August 25. This downward trend was primarily attributed to exporters selling dollars to settle their accounts at the end of the month, a common practice that increases the supply of dollars in the market.

While external factors presented a mixed picture, the robust selling of dollars by exporters emerged as the dominant force pushing the exchange rate lower. The U.S. dollar had previously shown strength due to safe-haven demand amid trade disputes between the U.S. and Canada and expanded economic sanctions on Iran. However, this trend was counteracted by other market movements.

International oil prices, specifically WTI, saw a decline of over 2%, influenced by perceptions that the sanctions on Iran were less severe than initially anticipated. Additionally, U.S. long-term interest rates also decreased. This was partly due to eased market concerns following reports that the Treasury Department could use its general account, comprising surplus funds, to finance the buyback of long-term government bonds, a move aimed at lowering interest rates.

Analysts suggest that despite potential upward pressure from the dollar's rebound and foreign investors' net selling of stocks, the strong dollar selling by exporters is capping the upside. If the won's momentum continues, potentially fueled by offshore betting, it could retest the previous day's low of 1376 won. The market is closely watching these dynamics as they unfold.

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The dollar-won exchange rate could face upward pressure due to the U.S. dollar index rebound and outflow of funds from foreign investors' net stock selling. However, strong dollar selling by semiconductor exporters is heavily weighing on the upper band, and if offshore betting also joins in to stimulate momentum, there is a possibility of retesting the previous day's low of 1376 won.