[Photo by Yonhap News]
As risk-averse sentiment spreads due to escalating tensions in the Middle East, the won-dollar exchange rate opened higher.
On June 11, the exchange rate for the Korean won against the U.S. dollar was trading at 1,523.4 won as of 9:15 a.m. in the Seoul foreign exchange market.
The rate opened at 1,525.5 won, up 1.3 won from the previous trading day.
The rise in the exchange rate was influenced by renewed tensions in the Middle East. Following the U.S. Central Command's announcement of additional airstrike plans against Iran, Iran responded by declaring it would fully close the Strait of Hormuz.
The Central Military Headquarters of the Iranian Armed Forces stated, "We will close the Strait of Hormuz and prohibit the passage of all vessels, including oil tankers and cargo ships."
As risk aversion spreads in global financial markets, U.S. stock markets closed lower. On June 10, the Dow Jones Industrial Average fell 1.87% to close at 49,918.78, while the S&P 500 dropped 1.62% to 7,266.99, and the Nasdaq Composite fell 1.98% to 25,169.50.
The weakness in tech stocks on the New York market is expected to impact the domestic stock market, with increased demand for dollars due to foreign capital outflows likely to put upward pressure on the exchange rate.
Min Kyung-won, an economist at Woori Bank, noted, "As foreign capital exits the domestic stock market, offshore custody purchases will likely stimulate an increase in the exchange rate. Additionally, the repatriation demand arising from the process of reducing domestic stock holdings ahead of the semi-annual rebalancing will also contribute to the rise in the exchange rate."
* This article has been translated by AI.
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