The won-dollar exchange rate has risen to the 1,370 won range due to rising oil prices and inflation concerns stemming from the U.S.-Iran military conflict.
As of 9:35 a.m. in the Seoul foreign exchange market, the exchange rate stood at 1,370.2 won against the U.S. dollar. At 6 a.m. that day, the rate was trading at 1,375.0 won, an increase of 4.6 won from the previous day's closing price.
The rise in international oil prices, coupled with increasing U.S. Treasury yields and a stronger dollar, has led to a risk-averse sentiment among investors.
Overnight, international oil prices surged. November futures for Brent crude rose by 4.60% to $94.65 per barrel, while October futures for West Texas Intermediate (WTI) increased by 5.20% to $90.22 per barrel.
Concerns over inflation due to high oil prices have pushed bond yields higher. The yield on the 10-year U.S. Treasury note continued to rise, reaching around 4.79%, the highest level since January 2025.
In response to the preference for safe assets, U.S. stock markets fell across the board. The Dow Jones Industrial Average closed down 419.02 points (0.79%) at 52,766.88.
The S&P 500 index fell by 54.67 points (0.71%) to close at 7,631.47, while the Nasdaq Composite dropped 271.12 points (1.03%) to finish at 26,099.77.
As inflation concerns spread, expectations for interest rate hikes by the Federal Reserve have strengthened the dollar. The dollar index, which measures the dollar's value against six major currencies, rose by 0.264% to 99.685.
The exchange rate is expected to rise to the 1,380 won range. Min Kyung-won, an economist at Woori Bank, stated, "We expect the exchange rate to attempt to recover to 1,380 won due to rising international oil prices, increasing Treasury yields, and a stronger dollar amid renewed geopolitical uncertainty in the Middle East."
He added, "We believe the pressure on the won, which had been on an upward trend recently, will increase, and there is a high possibility that dollar demand from importers and residents investing in overseas stocks will push the exchange rate higher."
* This article has been translated by AI.
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