SK Hynix sells U.S. dollars in Seoul foreign exchange market, driving strong rebound in South Korean won exchange rate
Affected by the large-scale selling of U.S. dollars by South Korean semiconductor giant SK Hynix in the foreign exchange market, the exchange rate of the Korean won against the U.S. dollar rebounded strongly on the 14th. As of the trading session on the 14th, the exchange rate of the US dollar against the Korean won fell 0.3% to 1,492.95. Foreign exchange market data shows that thanks to SK Hynix's foreign exchange settlement operations, the exchange rate of the U.S. dollar against the Korean won fell 0.7% to 1,486.20 during the session, hitting a new low in the past two months. According to informed financial officials and foreign exchange traders, SK Hynix’s move is mainly related to the demand for cross-border capital settlement arising from its recent issuance of American Depositary Receipts (ADRs). South Korean financial regulatory authorities have previously made preparations for related cross-border capital flows. In addition, the Korean shipbuilding giant Hanwha Ocean has sold a large number of U.S. dollar forward contracts in the past two trading days, coupled with the superimposed effect of SK Hynix’s current round of foreign exchange settlement, further amplifying the appreciation momentum of the Korean won. Foreign exchange analysts pointed out that South Korea's large and heavily weighted companies have concentrated on foreign exchange settlement and cross-border capital repatriation, which has significantly alleviated the recent depreciation pressure faced by the Korean won in the short term. However, given the global macroeconomic environment and the volatility of external demand in the semiconductor industry, the long-term trend of the Korean won exchange rate remains to be seen.