Korean Won Weakens as US-Iran Peace Talks Face Uncertainty

Uncertainty surrounding the peace negotiations between the United States and Iran has led to an increase in the won-dollar exchange rate.

As of 9:20 a.m. on June 22 in the Seoul foreign exchange market, the exchange rate for the Korean won against the U.S. dollar was trading at 1,530.7 won. The rate opened at 1,530.9 won, up 3.9 won from the previous trading day.

While the U.S. and Iran continue their technical negotiations regarding peace, tensions remain high regarding the outcome of these talks.

On June 21, U.S. President Donald Trump warned via social media that "Iran must immediately stop the provocations of its proxies in Lebanon, or else it will face a much stronger attack than last week."

Iran has also taken a hardline stance. The Iranian state news agency IRNA reported that "the Iranian delegation left the building where negotiations were taking place after meeting with the mediating Qatari delegation."

Additionally, Israeli Prime Minister Benjamin Netanyahu mentioned the possibility of continuing military operations in Lebanon, further escalating geopolitical tensions in the Middle East.

Minkyu Won, an economist at Woori Bank, stated, "Today, the domestic stock market is likely to decline due to a global risk-off sentiment, and we expect upward pressure on the exchange rate as dollar demand from remittances and import payments increases at the end of the quarter."

He added that the demand for currency exchange from retail investors, who have begun to increase their net purchases of U.S. stocks since late last week, could also contribute to the weakening of the won.