The won-dollar exchange rate against the U.S. dollar opened at 1,547.3 won on the 26th. It rose 4.6 won from the previous transaction day.
The won-dollar exchange rate is expected to rise slightly on the day. That is because tensions between the United States and Iran over the Strait of Hormuz have reignited. If the tense situation continues, demand for the safe asset, the dollar, could increase and the won-dollar exchange rate could rise.
Iran attacked a ship transiting the Strait of Hormuz on the 25th. In response, the United States conducted retaliatory airstrikes, hitting 10 Iranian military facilities. It was reported that the United States and Iran have now agreed to halt attacks against each other.
The likelihood of net selling of domestic stocks by foreign investors is also high. When foreigners sell stocks and exchange the proceeds into dollars, dollar demand increases and the won-dollar exchange rate tends to rise. Foreign investors recorded net selling of 4.6269 trillion won on the Korea Exchange the previous day. Foreign investors dumped 114.224 trillion won worth of domestic stocks from January to May this year. That is about 10 times the annual net selling last year (11.0768 trillion won).