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| An official at Hana Bank checks bundles of U.S. dollars at its office in Seoul. Yonhap |
By Lee Min-hyung
The won-dollar exchange rate soared Monday on heightened concerns over the U.S. Federal Reserve's additional rate hikes after the country reported robust job recovery.
The exchange rate closed at 1,252.8 won per dollar, up 23.4 won from the previous trading day, the highest closing price since Jan. 6.
The dollar strengthened in response to the huge gain in the labor market of the world's largest economy. According to data from the U.S. Labor Department, the country's unemployment rate fell to 3.4 percent in January, the lowest level since May 1969.
Investors displayed preference for safer assets as a reaction to the stronger-than-expected job report, as it diminished prevalent hopes for an earlier end to the Fed's monetary tightening.
The Korean stock market also plunged on the same day for a similar reason. The benchmark KOSPI closed with a loss of 1.7 percent at 2,438.18. The secondary Kosdaq also closed at 761.33, down 0.71 during the same period.
The unexpectedly solid job recovery increased the possibility that the Fed will maintain its hawkish rhetoric for a longer period of time. Earlier, investors expected the Fed to consider freezing its key rate in the latter half of 2023 on growing fears of the economy falling into a recession.
But the latest job data escalated a sense of fear that the Fed will not be in a hurry to shift its monetary policy, and will extend its hawkish stance possibly throughout this year.
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