On May 9, the South Korean won depreciated beyond the 1,400 mark relative to the US dollar, marking its second consecutive day of gains as improved sentiment regarding reduced global trade frictions bolstered the American currency.
The won started trading at 1,404.8 against each dollar, marking an increase of 8.2 won compared to the previous day’s close. This move came as part of a wider uptrend for the dollar following a new trade agreement between the United States and the UK, along with indications from U.S. President Donald Trump about potential reductions in tariffs imposed on China.
The dollar index, which gauges the value of the US currency relative to six significant foreign currencies, climbed over 100 following the announcement of the U.S.-UK deal, hitting 100.6 on May 8, according to U.S. timing.
As part of the agreement, the U.S. committed to lowering tariffs on up to 100,000 British automobiles from 25% to 10%, and eliminating the current 25% duties on British steel and aluminum imports. The UK responded by agreeing to allow more access for American ethanol, beef, farm products, and machinery into their markets, along with committing to buy $10 billion worth of planes from Boeing.
Trump additionally bolstered the dollar’s strength by showing confidence in the current trade discussions with Beijing. In response to whether U.S. tariffs on Chinese products might decrease if the negotiations proceed successfully, he stated: “We can’t increase them further; they’re already at 145, which means they will certainly come down.”
“I believe it was a quite amicable meeting. They aim to conduct it in a sophisticated manner,” Trump stated regarding the talks between the United States and China.