The won-dollar exchange rate is fluctuating in the upper 1480s as geopolitical risks in the Middle East resurface.
In the Seoul foreign exchange market on July 20, the won-dollar exchange rate was trading at 1486.4 won, up from the previous trading day.
The exchange rate closed at 1478.5 won on July 17, marking its lowest level in nearly two months since May 11, when it was at 1472.4 won. On that day, it rebounded by more than 10 won early in the session, reaching 1490.6 won by 9:02 a.m.
Over the weekend, tensions in the Middle East escalated after Iran attacked a U.S. military base in Jordan, resulting in casualties. The dollar has strengthened, with the dollar index hovering around 100.80.
However, the rise in both the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) fell short of market expectations, which may limit further increases in the exchange rate as expectations for additional interest rate hikes by the Federal Reserve weaken. Additionally, the reduced intensity of foreign selling in the domestic stock market and the inflow of funds from SK Hynix American Depositary Receipts (ADRs) are expected to support the won.
Min Kyung-won, an economist at Woori Bank, stated, "The continued net buying of domestic stocks by foreign investors is a key factor supporting the strength of the won. The combination of newly inflowed foreign funds leading to custody selling and the dollar sales from exporters will likely exert downward pressure on the exchange rate."
* This article has been translated by AI.
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