Exchange rate 1350 won again, KOSPI weak… Uneasy ‘tightening’

The exchange rate continues to rise. U.S. stocks are falling day after day, and the domestic stock market is also showing a downward trend.

On the 1st, the won-dollar exchange rate broke through the 1,350 won mark again during the day. The KOSPI started lower and hit the 2420 level during the day.

On the 1st, when the KOSPI opened at 2443.00, down 29.05 points (1.18%) from the previous trading day (2472.05), the index is displayed on the billboard of the Hana Bank Dealing Room in Jung-gu, Seoul. The KOSDAQ index started trading at 800.74, down 6.30 points (0.78%) from the previous trading day (807.04). The won-dollar exchange rate started at 1342.0 won, up 4.4 won from the previous trading day (1337.6 won). news

On that day, the won-dollar exchange rate in the Seoul Foreign Exchange Market opened at 1342.0 won, up 4.4 won from the previous floor, and broke through 1,350 won at 10:31. As of 10:40, it is recording 1350.5 won.

The exchange rate soared to 1352.3 won during the day before, but reversed its rise due to the easing of pressure on the strong dollar and the rebound of the offshore yuan. It is believed that it returned to some extent the previous day’s decline due to the resumption of sluggish risk preference on the day.

On the 29th (local time) of the US Federal Reserve Chairman Jerome Powell’s ‘hawkish’ (preferring monetary tightening) remarks on the 29th (local time), then John Williams, the governor of the Federal Reserve Bank of New York, also announced a tightening outlook on the 30th. is interpreted as continuing.

As of 10:40 am, the KOSPI was down 39.61 points (1.60%) from the previous day at 2432.44. The index opened at 2443.00, down 29.05 points (1.18%) from the previous day, and fell to the 2420s around 9:40 am, but is now fluctuating in the early to mid 2430s.

On the New York Stock Exchange the day before, the Dow Jones Industrial Average (-0.88%), the S&P 500 Index (-0.78%), and the Nasdaq Composite (-0.56%) centered on technology stocks fell all at once.

The market has been struggling with concerns about an economic slowdown due to the recent signs of a series of tightening measures from the US Federal Reserve (Fed). When the recession began, the Fed’s hawkish stance was expected to ease, but investor sentiment has shrunk as Fed Chairman Jerome Powell’s Jackson Hole speech expectations have been cut off.

“We do not expect the Fed to cut the federal funds rate next year,” said Cleveland Fed President Loretta Mester. You have to keep it,” he said. He added that the U.S. economy will grow far below 2% due to interest rate hikes and other factors, rising unemployment and continued volatility in financial markets.

Federal Reserve Chairman Jerome Powell. EPA Yonhap News

According to the ADP National Employment Report, private sector employment in the United States increased by 132,000 in August from the previous month, far below market expectations. There is a growing concern about stagflation, which occurs simultaneously with an economic recession and inflation.

As the job market appears sluggish, the Fed may feel the need to adjust the pace of rate hikes, but policy stance is unlikely to change as easily as it puts inflation protection first.

As the US has predicted a continuous rate hike and the exchange rate has risen sharply, Korea cannot stop raising interest rates either. The BOK has said that it is not free from the US Federal Reserve and that it will not be easy to stop rate hikes ahead of the US.

It is difficult to expect a rapid rise in the share price. As interest rates continue to rise at home and abroad until the end of the year, there are concerns that investment in the financial market will shrink and the interest burden on household and corporate loans will increase.

The Bank of Korea announced on the same day that the real gross domestic product (GDP) growth rate (preliminary, quarter-on-quarter) in the second quarter of this year stood at 0.7%. This is the eighth consecutive quarter of growth since the third quarter of 2020.

Private consumption increased by 2.9%, centering on semi-durable goods such as clothing and services such as entertainment culture and food and accommodation.

On the other hand, exports and imports decreased by 3.1% and 1.0%, respectively, centering on chemical products, primary metal products, and crude oil and natural gas. In the second quarter, real gross national income (GNI) fell by 1.3%.

By Kim Hee-won, staff reporter [email protected]

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