Middle East Tensions Ease, South Korean Won Fluctuates Around 1430 Won

As geopolitical tensions in the Middle East ease, the South Korean won is fluctuating around the 1430 won mark against the U.S. dollar.

In the Seoul foreign exchange market on August 4, the won was trading at 1431.5 won per dollar as of 9:15 a.m. The exchange rate recorded a decrease of 0.30 won from the previous session, reaching 1429.5 won at 6 a.m.

The fluctuations are attributed to the easing of geopolitical risks from the Middle East. On August 3, U.S. President Donald Trump stated during a press conference at the White House that negotiations with Iran are ongoing and that a conclusion is expected by August 4. He emphasized that this is Iran's last chance to sign a favorable agreement.

Following the U.S. decision to withdraw plans for a large-scale airstrike against Iran, international oil prices have significantly dropped. On August 3, West Texas Intermediate (WTI) crude for September delivery closed at $80.34 per barrel, down 5.11% from the previous trading day.

However, the recent end-of-month dollar selling by exporters has lowered the exchange rate level, while demand from importers is expected to support the lower end of the exchange rate.

Min Kyung-won, an economist at Woori Bank, noted, "The recent increase in overseas stock investments by residents indicates that demand for foreign asset investments remains robust. Today, steady inflows of bargain buying and payment demand from importers are likely to support the lower end of the exchange rate."

He added, "While the recovery of risk appetite due to the easing of geopolitical tensions in the Middle East may limit the upper end of the exchange rate, continued demand for dollar purchases for actual needs will also restrict any significant decline."