SEOUL — The local financial market experienced a jolt following the United States midterm elections, where the Democratic Party secured a decisive victory, pushing the South Korean won-to-dollar exchange rate past the 1,360-won threshold. This currency fluctuation has created a sharp divergence in fortunes across South Korea’s key industrial sectors.

According to the Seoul foreign exchange market on the 9th, the won-dollar exchange rate closed daytime trading at 1,356.6 won on the 6th, marking a sharp jump of 14.5 won from the previous session. During the intraday trading, the rate briefly surpassed the 1,360-won line, registering the largest single-day surge in roughly six months since May 12.

Market analysts attribute this trend to concerns that the Democratic sweep of both the Senate and the House could potentially stifle investments in artificial intelligence (AI) data centers. This sentiment triggered a downturn in domestic semiconductor-heavy stock markets, prompting foreign investors to offload shares and consequently driving down the value of the Korean won. Experts anticipate that the upward pressure on the exchange rate will persist.

For export-heavy industries, the weak won offers a distinct silver lining. Semiconductor giants such as Samsung Electronics and SK Hynix—whose export ratios exceed 90% and whose primary transactions are dollar-denominated—stand to benefit from increased won-converted revenues as the exchange rate climbs.

Similarly, shipbuilding and defense sectors, which frequently deal in multi-trillion-won contracts, find their total converted earnings expanding amidst a prolonged high-exchange-rate environment. The automotive industry is also reaping rewards; brokerage firms note that exchange-rate tailwinds have substantially contributed to the recent revenue growth of Hyundai Motor and Kia.

Conversely, industries dependent on imported raw materials are grappling with mounting cost pressures. Sectors like oil refining, petrochemicals, and steel, which import raw materials to manufacture finished goods, face unavoidable cost spikes. These businesses struggle to pass higher production costs onto consumers due to intense competition from low-priced Chinese goods.

The airline industry is similarly burdened, as major expenses such as aircraft lease fees, maintenance costs, and jet fuel are settled in US dollars. For instance, Korean Air reportedly experiences a fluctuation of roughly 55 billion won in foreign exchange valuation gains and losses—along with a tangible cash outflow increase of about 16 billion won—for every 10-won rise in the exchange rate.

Meanwhile, the US midterm elections concluded on the 3rd with the Democratic Party capturing majorities in both chambers of Congress. The Democrats secured at least 54 seats in the Senate and 254 seats in the House, achieving a full legislative sweep. As counting continues in remaining tight races, Democrats maintain a strong lead; a sweep of lingering competitive states like Alaska and Mississippi could push their Senate tally as high as 56 seats.

In response, US President Donald Trump took to his social media platform, Truth Social, on the 8th (local time), stating, "America has suffered a historic setback with this midterm election. We will return bigger and stronger than ever before," signaling his firm determination to fiercely contest the nation's political momentum.

[Copyright (c) Global Economic Times. All Rights Reserved.]