The won-dollar exchange rate against the U.S. dollar closed at 1,446.6 won on the 20th. It rose 1.1 won from the previous day. The rise in the won-dollar exchange rate is seen as the result of growing risk-off sentiment amid concerns that the United States will strike Iran. When risk aversion spreads, demand for the won, which is not a key currency, decreases and the won weakens.
In our time in the early morning, U.S. President Donald Trump set a deadline for a nuclear deal with Iran. On the 19th local time, President Trump, in a speech at the first meeting of the peace committee he leads at the Donald Trump Institute for Peace in Washington, D.C., said, "We (the United States and Iran) must reach a meaningful agreement. Otherwise, bad things will happen."
At the event, President Trump mentioned that the United States carried out a surprise strike on Iran's nuclear facilities in June last year. He then said, "Now we may have to take one step further, or we may not." He added, "We will probably make a deal," and "You will probably know the result within the next 10 days."
In addition, it appears that risk aversion was fanned by a U.S. private equity fund that had increased private credit investments in the artificial intelligence (AI) sector halting redemptions for some funds. According to local media, Blue Owl Capital suspended redemptions for Blue Owl Capital Corporation II, one of three funds it manages. If that happens, fund investors cannot withdraw money when they want.
Global investment bank UBS noted in a recent report that as software and data service corporations owned by private equity face the threat of being replaced by AI, there is a high likelihood that at least tens of billions of dollars in loans will sour within the year.