[외환브리핑]Powell’s weakening, which ended in one day.. Exchange rate is expected to rise again

Jerome Powell, chairman of the Federal Reserve System (Fed), speaks at a press conference immediately after the regular meeting of the Federal Open Markets Committee (FOMC) from 16-17 (local time). (Source = CNBC)

[이데일리 최정희 기자] Jerome Powell, chairman of the Federal Reserve System (Fed), has lost less than a day.

The Fed showed off its “pigeon” (a person who cares more about economic growth than inflation), which embraces a 6.5% economic growth rate and a 2.4% inflation rate and will not raise interest rates until the end of 2023. However, in less than a day, the market fluctuated again, asking if the Fed would eventually tolerate inflation and keep Treasury rates rising. Treasury yields rose, stock prices fell, and the dollar rose. On this day, the won-dollar exchange rate is expected to rise in one day.

According to the Seoul Foreign Exchange Brokerage on the 19th, the one-month transaction of won and dollar in the New York Difference Settlement Futures Exchange (NDF) market was priced at 1127.80 won. Considering the 1-month swap point (-0.15 won), the exchange rate is expected to start higher by 4.25 won from the closing price of the previous trading day (1123.70 won).

The US 10-year Treasury bond rate has risen to 1.7% from 5 pm on the 18th at the time of Korea starting from the European market. It also exceeded 1.75% during the day. Even the two-year interest rate, which is affected by monetary policy, is 0.157% at 5 pm on the 18th (local time), up 0.016 percentage points from the previous trading day. Powell said it would send a tightening signal only after checking the data without relying on the economic outlook, but this reflects concerns that the Fed will have no choice but to accelerate the austerity period due to excessive inflation.

The New York Stock Market fell all at once. The Dow Jones 30 Industrial Average closed at 32,862.30, down 0.46% from the previous trading day. It fell below the 33,000 line in one day. The Standard & Poor’s (S&P) 500 index closed at 3915.46, down 1.48%. The Nasdaq index, centered on technology stocks, plunged 3.02% to 13,116.17.

The dollar also showed strong strength amid the rapid rise in government bond yields. The dollar index is trading up 0.43% to 91.83. The exchange rate is expected to rise in one day due to the sentiment of avoiding risky assets such as a fall in stock prices and a strong dollar. Foreign investors are likely to resell their stocks on the KOSPI market and boost the exchange rate.

Min Kyung-won, a researcher at Woori Bank, said, “The continued inflow of payment demand from importers, which showed aggressive buying responses despite a steep exchange rate rise to 1130 won and 1140 won in early March, is a favorable material for the exchange rate rise. It is contributing to the creation of the market, so it will act as a variable to curb the rise of the exchange rate in the morning market today.”