The won-dollar exchange rate against the U.S. dollar opened at 1,513.6 won on the 16th. It rose 2.5 won from the previous transaction day.
On this day, the won-dollar exchange rate is expected to hover around 1,510 won on prospects for a U.S.-Iran end-of-war agreement. When the war ends, investor sentiment for risk assets such as stocks recovers. Demand for the dollar, a safe asset, weakens, so the won-dollar exchange rate may fall.
U.S. President Donald Trump said that the Strait of Hormuz will be fully opened immediately on the 19th, when a memorandum of understanding (MOU) to end the war with Iran is signed. During a summit with French President Emmanuel Macron, Trump said, "I hope we can maintain good relations (with Iran) and get along well," adding, "If not, we will go back to square one, but I don't think that will be necessary."
Accordingly, West Texas Intermediate (WTI) on the 15th (local time) closed at $80.75 per barrel, down 4.8% from the previous transaction day. Brent futures fell 4.9% to $83.2. It is the lowest level since Mar. 10, early in the Iran war.
New York stocks also finished higher. The Standard & Poor's (S&P) 500 index rose 1.65%, the Nasdaq composite climbed 3.07%, and the Dow Jones Industrial Average added 0.92%. The Dow hit a record high.
Net purchases of domestic stocks by foreign investors are also expected. When foreign investors exchange the dollars they hold into won to buy domestic stocks, the won appreciates and the won-dollar exchange rate tends to fall.
Foreign investors made net purchases of 1.4 trillion won on the 12th and 1 trillion won the previous day. Through the 11th, they ended 24 straight trading days of net selling and turned to net buying.