'US-Iran Negotiation Stalemate, Foreign Net Selling'... Won-Dollar Exchange Rate Surges 17.5 Won (Update)

Foreign Investors Sell Over 6 Trillion Won in Stocks
Oil Prices and Dollar Value Rise Amid Stalled Negotiations

The won-dollar exchange rate closed with a sharp increase of 17.5 won. The ongoing stalemate in the end-of-war negotiations between the United States and Iran, along with net selling of domestic stocks by foreign investors, appears to have contributed to the sharp rise in the exchange rate.

On May 12, at the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,489.9 won as of 3:30 p.m., up 17.5 won from the previous trading day.

The exchange rate opened at 1,475.0 won, up 2.6 won from the previous trading day, but continued to climb during the session, reaching as high as 1,490.0 won. This is the first time in a month, since April 13, that the rate has risen to the 1,490 won level.

Recently, the continued net selling by foreign investors in the domestic stock market has caused the exchange rate to rise for three consecutive trading days. On this day, foreigners sold stocks worth 6.63 trillion won in the KOSPI market.

In addition, the difficulties in the end-of-war negotiations between the United States and Iran appear to have contributed to the strengthening of both oil prices and the value of the dollar.

The price of West Texas Intermediate (WTI) crude for June delivery is trading at $100.42 per barrel, up $2.35 from the previous day. Also, the dollar index, which measures the value of the dollar against the currencies of six major countries, rose 0.29 points from 97.96 to 98.23 compared to the previous day.

Park Sanghyun, an economist at iM Investment & Securities, said, "The impact of net selling by foreign investors and the stalemate in the Middle East situation contributed to the rise in the exchange rate. If the United States strikes Iran again, the exchange rate could rise to the 1,500 won level. However, if the war issue is resolved and Korea's current account surplus grows, the exchange rate is expected to stabilize quickly."