The won-dollar exchange rate against the U.S. dollar opened at 1,512 won on the 2nd. It rose 7.7 won from the previous trading day.
On this day, the won-dollar exchange rate is expected to rise despite news that a U.S.-Iran cease-fire deal is imminent. Concerns about U.S. inflation have grown, and international oil prices turned higher overnight, expanding demand for dollars. When dollar demand expands, the won weakens and the won-dollar exchange rate rises.
International oil prices closed higher on the 1st (local time). Brent futures rose 4.2% from the previous transaction day to $94.98 per barrel, and West Texas Intermediate (WTI) futures rose 5.5% to $92.16 per barrel. In contrast, the Standard & Poor's (S&P) 500 index and the Nasdaq composite rose 0.26% and 0.42%, respectively, hitting a record high.
U.S. President Donald Trump, regarding the timing of a memorandum of understanding (MOU) on a cease-fire with Iran, said, "I think people will be talking about that issue within the next week," adding, "There are still a few issues left to be resolved." President Trump has repeatedly stressed that Iran cannot possess nuclear weapons in any way.
Net selling of domestic stocks by foreign investors is also expected to have an impact. When foreigners sell domestic stocks and exchange the proceeds into dollars, dollar demand expands, which is a factor that pushes the won-dollar exchange rate higher.
Foreign investors also recorded net selling of 1.8573 trillion won the previous day. Net selling in May alone amounts to 44.715 trillion won. On Apr., it was 4 trillion won, down from the previous month (43 trillion won), but it has expanded again in May.