The exchange rate of the Korean won against the U.S. dollar has surged as tensions between the U.S. and Iran escalate.
As of 9:09 a.m. on June 4, the exchange rate stood at 1529.6 won per dollar, opening at 1530.0 won, a rise of 13.6 won. This marks the first time since March 31 that the rate has exceeded 1530 won during trading hours.
The renewed military confrontations between the U.S. and Iran, coupled with a lack of progress in peace negotiations, have weakened investor appetite for riskier assets.
In the previous trading session, all three major U.S. stock indices fell. The Dow Jones Industrial Average closed down 620.72 points (1.21%) at 50,687.07.
The S&P 500 index finished 56.10 points (0.74%) lower at 7,553.68, while the Nasdaq Composite dropped 239.93 points (0.89%) to close at 26,853.98.
International oil prices have continued to rise for three consecutive trading days. The August futures for Brent crude closed at $97.81 per barrel, up 1.9% from the previous session. July futures for West Texas Intermediate (WTI) crude rose 2.4% to $96.02 per barrel.
On June 3, the Islamic Revolutionary Guard Corps (IRGC) of Iran announced it had attacked U.S. military bases in Kuwait and Bahrain in response to strikes on an Iranian oil tanker and a communications tower on Qeshm Island.
Earlier, U.S. forces had attacked radar facilities on Qeshm Island on June 1 and disabled the Iranian oil tanker with a missile on June 2.
In light of the heightened risk aversion, foreign investors are also selling off domestic stocks. Early in the trading session, foreign investors sold a net 1.8634 trillion won in the securities market.
Minkyoung Won, an economist at Woori Bank, stated, "The strong dollar and the sharp rise in the non-deliverable forward (NDF) exchange rate to the 1530 won level will support the lower end of the exchange rate. I expect the rate will attempt further increases after the initial gap up today."
Meanwhile, during a joint market situation assessment meeting held in the morning, Deputy Prime Minister and Minister of Economy Koo Yun-cheol remarked, "In a situation of high external uncertainty, we are closely monitoring to prevent the spread of anxiety. We will take necessary measures immediately against excessive market movements."
* This article has been translated by AI.
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