Market Turmoil Following Trump's Tariff Suspension

The financial markets experienced significant volatility after U.S. President Donald Trump announced a 90-day suspension of reciprocal tariffs. This unexpected move led to a sharp decline in the exchange rate and a notable surge in the KOSPI index.

Exchange Rate and Stock Market Reaction

The dollar-won exchange rate dropped by 38.1 won at the opening, marking the largest decrease since the global financial crisis in 2008. Concurrently, the KOSPI index rose by more than 5%, signaling a strong market rebound.

Details of the Tariff Suspension

President Trump's executive order reduced tariffs to a basic 10% for 90 days, excluding specific items like automobiles and steel. This decision was influenced by negotiations with over 75 countries aiming to address trade barriers without retaliatory measures.

Global Trade Implications

While tariffs on South Korean goods were lowered, China faced increased retaliatory tariffs up to 125%. This move has sparked discussions on global trade dynamics and the potential for further negotiations.

Market Analysts' Perspectives

Experts anticipate a continued flow of funds into risk currencies and a possible resurgence in foreign net buying. The activation of the KOSPI buy-sidecar after eight months underscores the market's dramatic response to these developments.