On December 19, the KRW-USD exchange rate soared to its highest level since the global financial crisis, driven by expectations of a delayed U.S. interest rate cut, strengthening the dollar. At the Seoul foreign exchange market, the closing weekly exchange rate for the Korean won against the U.S. dollar rose by 16.4 won from the previous day, reaching 1,451.9 won. In overnight trading, the increase slightly eased, with the rate closing at 1,447.30 won. The exchange rate surpassing the 1,450-won level is the first since March 13, 2009 (1,483.5 won), during the height of the financial crisis, marking a 15-year and 9-month gap.

■ Why the Surge?
The exchange rate, which started the year at the lower 1,300-won range, exceeded the 1,400-won mark after Trump’s election in November. On November 4, shortly after a state of emergency declaration, the rate briefly surpassed 1,440 won in overnight trading. Recently, the rate hovered around the 1,430-won range. However, following the Federal Reserve's December 18 announcement of an interest rate cut and a slower pace of future rate reductions, the psychological resistance level was repeatedly breached.

The Dollar Index, which measures the dollar's value against six major currencies, also hit a 25-month high of 108.17.

As the exchange rate continues its sharp climb, panic is intensifying among Korean students and expatriates in the U.S. Meanwhile, U.S.-based importers of Korean products and Korean Americans planning to remit money to Korea or visit the country are benefiting from the stronger dollar, revealing a mixed set of emotions.

■ Those Hit by the Exchange Rate
Korean students, expatriates, and so-called “goose families” living off remittances from Korea are finding the soaring KRW-USD exchange rate increasingly burdensome.

Oh, a 21-year-old student at USC, shared, "When the rate exceeded 1,400 won, I was worried, but now my father in Korea called to suggest that I consider taking a break from school and fulfilling my military service if the rate reaches 1,500 won.”

Yu, 61, who sold real estate in Korea earlier this year, is also struggling to decide when to remit the proceeds, which are currently deposited in a Korean bank. He said, "The exchange rate was just over 1,300 won at the beginning of the year, and now it's risen by more than 150 won. Since the rate is even higher when transferring money from Korea, I’m unsure when to bring the money over."

■ Those Benefiting from the Exchange Rate
In contrast, U.S.-based importers of Korean products see the soaring KRW-USD exchange rate as a boon, as they can reduce import costs through exchange rate gains. Korean Americans planning trips to Korea or remitting money to loved ones are also benefiting from the strong dollar.

Cho, 47, who plans to visit Korea for a month during the holidays, said, “Instead of exchanging a lump sum, I plan to convert small amounts whenever the rate rises, and I’ll also choose the local currency option when paying by card to save on travel costs.”

Woo, who sends a fixed amount to his parents in Korea every month, said, “As a sender, the strong dollar is advantageous, but it’s bittersweet considering the economic struggles and currency fluctuations my family is enduring back home.”

■ Outlook
Financial analysts predict that the demand for the safe-haven dollar will persist amid heightened uncertainty surrounding U.S. monetary policy next year. Continued foreign investor net sales in the Korean stock market are also likely to push the exchange rate to 1,500 won in the short term.

By Reporter Roh Se-hee

<Sehee Roh>