Won–dollar volatility surged to its highest level last week since South Korea extended foreign exchange trading hours. This increase marks a significant shift in the market’s behavior as global and domestic issues continue to create uncertainty.
During the second week of April, the weekly fluctuation in the won–dollar exchange rate hit 67.6 won. This level hasn’t been seen since July 2024, when South Korea expanded trading hours to run from 9 a.m. to 2 a.m. Previously, markets closed at 3:30 p.m.
Compared to previous records before this change, last week’s fluctuation was the largest since November 2022. At that time, the weekly fluctuation reached 101 won. That historic high came during another period of global instability.
The won closed at 1,421 per US dollar in after-hours trading last Friday. This value represents a 40-won increase from the previous week. It also marked the strongest performance since December 5, signaling sharp changes in short timeframes.
The Korean won has hovered around the 1,450 mark since December. This ongoing instability stems from multiple factors, including US tariff threats and internal political drama. Former President Yoon Suk Yeol’s unexpected declaration of martial law last year added to investor concerns.
Meanwhile, US President Donald Trump paused “reciprocal” tariffs for 90 days. However, he still imposed a base 10 percent tariff on imports from South Korea and other countries. These mixed signals further fueled won–dollar volatility.
Adding to the pressure, the US hiked tariffs on Chinese goods to 125 percent. China responded quickly with retaliatory moves, prompting fears of a full-blown global trade war. This situation affects South Korea’s export-heavy economy significantly.
Last week, Washington announced additional tariffs: 25 percent on South Korea, 24 percent on Japan, and 20 percent on the European Union. These measures forced many countries to scramble for new trade agreements.
As uncertainty persists, won–dollar volatility continues to reflect both global tension and domestic instability. Traders and policymakers now face the challenge of navigating this turbulent environment.
