The won-dollar exchange rate against the U.S. dollar stood in the 1,300-won range on the 19th. It was the first time in about 10 months that the rate fell below 1,400 won intraday since Oct. 2 last year (1,399.5 won).
According to the Seoul foreign exchange market that day, the rate was 1,413.5 won at 9 a.m., then extended its decline to about 1,399 won at 12:02 p.m. Analysts said it was because the U.S. Federal Reserve (Fed) is now more likely not to raise its benchmark rate next month. When the United States holds rates steady, the dollar tends to weaken and the exchange rate tends to fall.
In particular, the fact that major exporters, including SK hynix, are selling dollars they hold also had an impact. As dollars are supplied to the Seoul foreign exchange market, the won is relatively strengthening. Corporations' dollar selling was typically done at the end of each month, but recently it has been happening from time to time, affecting the rate, according to analysis. Min Kyung-won of Woori Bank said, "The strategy has shifted to steady selling responses centered on semiconductor companies."
However, rising international oil prices amid heightened tensions in the Middle East are weighing on the rate. U.S. President Donald Trump said there were no ongoing talks with Iran and noted that the U.S. blockade of the Strait of Hormuz was "fully maintained." West Texas Intermediate (WTI) rose 0.52% from the previous trading day to $84.95 per barrel.