Won-Dollar Exchange Rate Opens Above 1,500, Fluctuates Around 1,490 Early in Session (Update)

Intraday Trading Surpasses 1,500 Won Level for the First Time Since March 12, 2009

As international oil prices soared above 100 dollars per barrel, the won-dollar exchange rate surpassed 1,500 won during trading on March 16.

On the 16th, employees are monitoring the stock market and exchange rates in the dealing room at the Seoul Hana Bank headquarters.

On this day, the won-dollar exchange rate opened at 1,501.0 won in the Seoul foreign exchange market, up 7.3 won from the previous trading day’s weekly closing price (as of 3:30 p.m.). It is the first time since March 12, 2009, during the financial crisis (when the intraday high reached 1,500 won), that the exchange rate has exceeded 1,500 won during weekly trading. After a sharp initial rise right after the opening, the rate soon pulled back and hovered in the mid-1,490 won range early in the session. As of 9:14 a.m., it stood at 1,494.6 won.

This is due to concerns over a prolonged war between the United States and Israel, and Iran. South Korea, with its high dependence on oil imports, is one of the countries most vulnerable to oil price shocks. Previously, driven by fears of a sharp rise in international oil prices due to the war, the exchange rate soared as high as 1,506.5 won during nighttime trading on March 3. As oil prices climbed above 100 dollars per barrel, the rate again touched the 1,500 won level during intraday trading on March 13. However, as overnight trading tends to have low volume, price fluctuations are generally larger during these sessions.

The global strength of the dollar is also contributing to the weakness of the won. The dollar index, which measures the value of the dollar against the currencies of six major countries, surpassed 100 on March 13 and is currently at 100.263.

Experts predict that the won-dollar exchange rate will continue to be volatile for the time being as war concerns persist. For the two weeks leading up to March 13, the daily volatility of the won-dollar exchange rate (based on weekly closing prices) exceeded 14 won.

Mingyeongwon, an economist at Woori Bank, said, “Last weekend, the United States bombed Kharg Island, which is a central hub for Iran’s oil export infrastructure, and Iran subsequently threatened to retaliate by attacking oil refineries linked to U.S. interests in the Middle East. This has heightened fears of a protracted conflict involving Iran. In addition, the prices of key commodities such as aluminum, fertilizer, sugar, and helium have surged, raising pessimism that not only could there be oil price-driven inflation, but also a global economic shock. As a result, risk appetite has weakened.”

This content was produced with the assistance of AI translation services.