International oil prices have fallen and the dollar has weakened amid expectations for the reopening of the Hormuz Strait, with the won-dollar exchange rate fluctuating in the low 1420s.
As of 9:15 a.m. on August 6, the exchange rate in the Seoul foreign exchange market was trading at 1423.6 won against the U.S. dollar.
The rate opened at 1422.5 won, down 2.0 won from the previous day's closing price as of 6 a.m.
Overnight, Iran announced an agreement with Oman to establish a joint shipping route in the Hormuz Strait, raising hopes for reduced tensions in the Middle East. Given that the Hormuz Strait is a key passage for global oil transport, the possibility of reopening has put downward pressure on international oil prices.
According to Iran's state-run IRNA news agency, Foreign Ministry spokesman Esmail Baghaei stated, "Iran and Oman, which border the Hormuz Strait, have been negotiating for the past two months to establish a safe shipping route for commercial vessels, reviewing various aspects including technical, legal, security, and environmental factors."
Alongside the decline in international oil prices, U.S. Treasury yields have also decreased, contributing to the dollar's weakness. On August 5, West Texas Intermediate (WTI) crude for September delivery closed at $75.22 per barrel, down 0.73% from the previous trading day on the New York Mercantile Exchange (NYMEX). Meanwhile, Brent crude for October delivery finished at $79.45 per barrel, up 0.11% on the London ICE Futures Exchange.
The dollar index (DXY), which measures the dollar's value against six major currencies, is fluctuating around 99.65.
Min Kyung-won, an economist at Woori Bank, noted, "The exchange rate is expected to continue in the low 1420s, reflecting the decline in international oil prices and the dollar's weakness due to expectations for the reopening of the Hormuz Strait. In a weak dollar environment, there is also a possibility of inflows from offshore short plays."
He added, "If foreign capital flows into the domestic stock market, which has eased valuation burdens, there could be additional upward pressure on the won. However, the demand for dollar purchases from importers will support the lower end of the exchange rate."
* This article has been translated by AI.
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