The won-dollar exchange rate against the U.S. dollar closed at 1,524.2 won on the 10th, up 12.1 won from the previous trading day. It had fallen to 1,512 won the day before on the back of strong verbal intervention by the foreign exchange authorities, but then rebounded. On a weekly closing basis, the won-dollar exchange rate has remained above 1,500 won for 17 consecutive trading days from the 15th of last month through today. It is the second-longest stretch after the foreign exchange crisis (49 consecutive trading days).
The rise in the won-dollar exchange rate that day is seen as stemming from a physical clash between the United States and Iran, which had been engaged in previous negotiations. If a state of war continues, demand for the safe-haven dollar expands, becoming a factor pushing the won-dollar exchange rate higher.
U.S. forces launched airstrikes against Iran on the 8th (local time). After a U.S. Army Apache helicopter patrolling the skies over the Strait of Hormuz crashed under Iranian attack, the United States moved to retaliate. U.S. President Donald Trump said on social media, "The United States inevitably must respond to this attack." The Iranian side claimed it did not intentionally target the U.S. military helicopter.
Net selling of domestic stocks by foreign investors also had an impact. Following the previous day, foreigners were net sellers of more than 2 trillion won again that day. Foreigners recorded net selling for 23 consecutive trading days through today. The cumulative net selling is estimated to exceed 70 trillion won.
Meanwhile, the foreign exchange authorities plan to begin inspections this week into speculative transactions and market-disrupting activities occurring in the foreign exchange market. The authorities assessed that even taking into account the Middle East war and foreign investors' net selling of stocks, the won's excessive weakness is due to speculative transactions.