The dollar-to-won exchange rate rose by more than 10 KRW (about $0.0075), reflecting a mix of optimism over easing geopolitical tensions and caution ahead of Donald Trump’s address to the nation.
In Seoul’s foreign exchange market on April 2, the dollar-won rate opened at 1,512.2 KRW (about $1.13), up 10.9 KRW (about $0.0082) from the previous day.
While hopes for peace between the U.S. and Iran weakened the dollar and pushed down international oil prices, the rate increase mirrored market jitters ahead of Trump’s speech.
KB Kookmin Bank economist Lee Min Hyuk said market positioning is likely to remain limited and trading directionless until the speech. He added that if Trump delivers a conciliatory message on peace, it could boost risk appetite, lifting domestic stocks and won-denominated assets and potentially pushing the dollar-to-won rate down to the low 1,500 KRW (about $1.13) range.
The external environment has become more favorable as prospects for peace improve. WTI crude oil prices have dipped below $100, while the dollar index has remained under 100 for two straight days, hovering around 99.5.
Analysts suggest that the exchange rate could decline if tensions ease, as South Korea’s government bolsters its efforts to stabilize the foreign exchange market.
Lee added that while the near-term direction of the exchange rate will depend on developments in the Iran conflict and oil price trends, a stabilization in the situation and easing oil prices could increase downward pressure on the dollar-to-won rate, with policy factors likely amplifying that move.