South Korean Won Rises Early as UAE OPEC Exit Stirs Oil Volatility

The won weakened early against the U.S. dollar but soon turned lower, as traders weighed easing Middle East-related concerns and shifting oil-price expectations.

In Seoul’s foreign exchange market, the won was trading at 1,473.5 per dollar as of 9:30 a.m. on the 29th.

The exchange rate opened at 1,474.0, up 0.4 won from the previous session, then reversed direction shortly after trading began.

Markets are watching the United Arab Emirates’ decision to withdraw from the Organization of the Petroleum Exporting Countries, which has fueled expectations of increased crude supply in the near term. Traders said the prospect of independent production increases after the exit could curb the recent run-up in oil prices.

International crude prices remain elevated, but volatility has increased. On the New York Mercantile Exchange, June West Texas Intermediate briefly rose above $100 a barrel before paring gains to settle up 3.7% at $99.93.

The dollar was slightly weaker. The dollar index, which measures the greenback against six major currencies, fell 0.02% to 98.593.

Min Kyeong-won, an economist at Woori Bank, said position adjustments ahead of the U.S. Federal Open Market Committee meeting were likely to drive a pullback. He added that importers’ demand for dollars to settle payments has remained “consistently active,” contributing to an intraday backdrop in which upward pressure can dominate.