The places that suffer the most from the ‘King Dollar’ are ‘Japan and Korea’ – Reuters

2024-04-24 16:02:12

Deputy Prime Minister Choi Sang-mok and Minister of Strategy and Finance, who is visiting Washington, D.C. to attend the G20 Finance Ministers’ Meeting and the IMF/WB Spring Meeting, attended the ‘1st Korea-U.S.-Japan Finance Ministers’ Meeting’ held at the U.S. Treasury on the 17th (local time). making a statement Provided by Ministry of Strategy and Finance

Reuters reported on the 23rd (local time) that the US King Dollar (strong dollar) is causing exchange rate pain not only to Japan, China, and Korea, but also to the Eurozone and Sweden.

The dollar index (the value of the dollar against the currencies of six major countries) is at its highest level since November of last year and has been rising for four consecutive months on a monthly basis. As the U.S. consumer price index (CPI) exceeded expectations in March, expectations of a U.S. interest rate cut have declined significantly, putting pressure on the global foreign exchange market.

The sound of the song is heard the loudest in Japan and Korea. The yen-to-dollar exchange rate soared below 155 yen, and the yen fell to its lowest level since 1990. The won also plunged 7% last month, reaching its lowest level in a year.

James Rhodes, a foreign exchange and emerging market strategist at Morgan Stanley, interpreted the statement following the meeting of the finance ministers of Korea, the United States and Japan last week to mean, “If the foreign exchange authorities of Japan and Korea want to suppress exchange rate volatility, the United States will not necessarily oppose it.”

Next is all emerging Asian countries, including China. The Indian rupee and Vietnamese dong fell to record lows, while the Indonesian rupiah was at a four-year low. A weakening yuan may increase China’s export competitiveness, but may further increase pressure on capital outflow.

In addition, the euro was also selected as a currency that cannot be free from the pressure of the king dollar. This year, both the European Central Bank (ECB) and the U.S. Federal Reserve (Fed) were expected to begin interest rate cuts in June, but the likelihood of a lag is now increasing.

As the market is expecting the ECB to cut interest rates in June and the Federal Reserve to cut interest rates in September, the euro has fallen to its lowest level in five months.

In addition, Reuters added, “Sweden also suffers from the king dollar,” and “Import inflation due to a weak currency puts pressure on Sweden, which has a small economy.”

(Seoul = News 1)

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2024-04-24 16:02:12