The won-dollar exchange rate against the U.S. dollar closed weekly trading at 1,446.7 won at 3:30 p.m. on the 29th. That was down 15.8 won (1.08%) from the previous trading day's weekly closing price. It was the lowest level in 152 days (102 trading days) since Feb. 27 (1,439.7 won), when the Middle East war broke out.
The recent drop in the exchange rate is seen as stemming from dollar weakness as talks between the United States and Iran proceed. President Donald Trump said, "We are in very deep negotiations with Iran." If the war situation ends, demand for the safe asset dollar could fall and the exchange rate could decline.
Export corporations selling the dollars they earned are also affecting the exchange rate. As forecasts emerge that the won will strengthen (a lower exchange rate), they are putting their dollar holdings up for sale. This mood began with SK hynix's listing of American depositary receipts (ADR). SK hynix is converting part of the $26.5 billion raised through the ADR listing into won.
Conversely, net selling of domestic stocks by foreign investors is a burden. When foreigners sell domestic stocks and convert them into dollars, dollar demand expands and the exchange rate tends to rise. Foreign investors recorded net selling of 4.9664 trillion won the previous day and 764.3 billion won on the day.
The increase in Korean retail investors trading U.S. stocks is also a factor pushing the exchange rate higher. From the 1st to the 27th of this month, domestic investors' net purchases of U.S. stocks totaled $3,589.99 million (about 5.2762 trillion won). That was 5.5 times the net purchases in June ($632.96 million).