As President Donald Trump signaled the war may be winding down, international oil prices fell, causing the dollar-won exchange rate to open around 1,470 KRW (about 1 USD) after nearly reaching 1,500 KRW (about 1.02 USD).
In Seoul’s foreign exchange market on Tuesday, the dollar-won exchange rate opened at 1,470.8 KRW (about 1 USD), down 24.7 KRW (about 0.017 USD) from the previous day’s closing price at 3:30 p.m. (South Korean time)
The exchange rate, which had surged close to 1,500 KRW (about 1.02 USD) as oil prices spiked to 110 USD per barrel, stabilized within a day as crude prices retreated.
G7 finance ministers announced preparations to release strategic oil reserves, while President Donald Trump’s remarks suggesting the conflict was nearing its end pushed oil prices below 100 USD per barrel, after nearly touching 120 USD.
Wall Street’s major indices rallied, and South Korea’s KOSPI, which had plummeted the previous day, rebounded sharply in early trading, triggering a trading curb.
However, uncertainty lingers as Trump didn’t outline a specific exit strategy, and Iran maintains its defiant stance.
Moon Jeong-hee, an economist at KB Kookmin Bank, anticipates a significant drop in the exchange rate due to the potential end of the Middle East conflict, Wall Street’s rebound, and easing risk aversion. However, she notes that despite Trump’s ceasefire hints, oil prices continue to fluctuate between 80 USD and 90 USD, and Iran’s refusal to declare an end to hostilities suggests ongoing market anxiety.