Today (26th), the won/dollar exchange rate broke through 1,420 won for the first time in about 13 years and 6 months.
In the Seoul foreign exchange market, the exchange rate of the won against the dollar rose to 1,421.0 won in a matter of seconds right after the opening at 9 am today.
It is the first time in 13 years and 6 months that the exchange rate has crossed 1,420 won during the day since March 31, 2009 (1,422.0 won at the high price) during the financial crisis.
The exchange rate today opened at 1,419.0 won, up 9.7 won from the closing price of the previous trading day, and as of 9:17 am, the won/dollar exchange rate is 1,421.7 won per dollar, up 12.4 won.
Even after breaking through the 'big figure' (large digits), it is in the process of ascending by neutralizing the burden of the high point and heading to the right.
The U.S. central bank, the Federal Reserve (Fed), is likely to take another 'giant step' (a 0.75 percentage point increase in the key interest rate) this year, and the UK's pound plunged, which strengthened the preference for the dollar. .
In a dot plot released after the Federal Open Market Committee (FOMC) regular meeting last week, the Fed expects the year-end rate to be 4.40%. suggested.
The market expects the Fed to take another giant step towards this.
In addition, the 50 trillion won tax cut announced by the UK last weekend stimulated concerns about an economic slowdown and sparked a fear of the pound, further boosting the dollar's value.
On the evening of the 23rd, the British government announced the largest tax cut in 50 years.
According to this, the measure to lower the basic income tax rate from 20% to 19% will be implemented in April next year, one year earlier, and the maximum tax rate will be lowered from 45% to 40%.
It also plans to cut taxes by £45 billion (about KRW 70 trillion) by 2027, including by abolishing the corporate tax increase plan and removing the upper limit on bonuses for bankers.
The UK government explained that it was a response to the recession, but it did not announce a plan to cut spending to make up for dwindling tax revenues, raising market anxiety.
As a result, the value of the pound fell to $1.08.
The pound, which was usually valued higher than the dollar, is at its lowest level in 37 years, and there is also an expectation that it will form 'parity' (one dollar = one pound) following the euro.
The dollar index, which shows the value of the dollar against six major currencies, broke through the 113 level, reaching its highest level in about 20 years and 4 months since the end of May 2002.