The won-dollar exchange rate rose to the mid-1330s in early trading on concerns over escalating geopolitical tensions in the Middle East and fears of further tightening by the U.S. Federal Reserve. The increase in international oil prices and rising U.S. government bond rates are supporting the strength of the dollar.
As of 9:12 a.m. on November 13 in the Seoul foreign exchange market, the won-dollar exchange rate was at 1,334.9 won. The previous day, the exchange rate closed at 1,330.7 won, down 2.9 won from the prior trading day at 3:30 p.m.
In the global foreign exchange market overnight, the dollar strengthened due to rising international oil prices, which also contributed to an increase in U.S. government bond rates.
Tensions in the Middle East have escalated following claims by Yemen's Houthi rebels that they attacked major oil pipelines and facilities in Saudi Arabia. Additionally, U.S. President Donald Trump stated that a deal with Iran is unnecessary, further heightening regional tensions. On November 12, the price of West Texas Intermediate (WTI) crude oil for December delivery rose by 2.55%, while Brent crude for January delivery increased by 3.30%.
Expectations for additional interest rate hikes by the Federal Reserve are also fueling the dollar's strength. Cleveland Federal Reserve Bank President Loretta Mester remarked that to bring inflation back to the target level of 2%, interest rates must be moved to a restrictive level. Chicago Fed President Austan Goolsbee also noted that inflation is moving in the wrong direction in several respects.
U.S. stock markets fell amid rising oil prices and the resignation of Jensen Huang, CEO of Nvidia. The Dow Jones Industrial Average dropped by 189.40 points (0.36%), while the S&P 500 and Nasdaq Composite indices fell by 0.35% and 0.39%, respectively.
The exchange rate is expected to rise slightly today.
Min Kyung-won, a researcher at Woori Bank, stated, "As President Trump indicated a shift in diplomatic stance by saying negotiations with Iran are unnecessary, international oil prices have surged, resulting in a stronger dollar. Today, the won-dollar exchange rate is expected to rise due to increased pressure from higher oil prices and government bond rates."
* This article has been translated by AI.
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