iM Securities said on the 16th that concerns persist over high oil prices and a prolonged Iran crisis, making it highly likely that the won-dollar exchange rate will break above the 1,500-won level.
As the United States has failed to find an exit from the Iran crisis, fears that the situation could drag on are amplifying the surge in oil prices and the strength of the dollar. In particular, with the risk of inflation rising due to higher oil prices, global funds are also leaving safe-haven assets such as Government Bonds and the gold market.
Park Sang-hyun, a researcher at iM Securities, said, "With high oil prices and the potential for a prolonged Iran crisis still acting as variables that heighten volatility, the strong dollar trend is also expected to continue."
iM Securities said that although key Central Bank monetary policy meetings, including this week's U.S. Federal Open Market Committee (FOMC) meeting, are scheduled, they are unlikely to have a major impact on the foreign exchange market.
Park explained, "As the market continues to watch oil prices, credit crunch risks in private markets due to surging interest rates will also act as variables in the foreign exchange market."
Park added, "If high oil prices persist due to heightened uncertainty over the Iran crisis, it will be inevitable for the won-dollar exchange rate to settle above the 1,500-won level," adding, "The key will be the intensity of government intervention, and the exchange rate is likely to move in the 1,480–1,520 won range."