The won-dollar exchange rate stood at 1,373.5 won per $1 at 9 a.m. on the 2nd, up 3.1 won (0.22%) from the prior transaction week's closing price.
There is a view that the rate could break above 1,380 won on the day. Government Bonds yields and international oil prices are rising together as the United States and Iran begin reciprocal airstrikes. The United States launched additional airstrikes on Iran after two days. It said the move was retaliation for the Islamic Revolutionary Guard Corps (IRGC) attacking civilian vessels in the Strait of Hormuz and U.S. service members. Iran responded that it would move to take strong retaliatory measures.
Amid the military clash, the U.S. 10-year Government Bonds yield rose intraday to 4.798% on the 1st (local time), the highest since January last year. The U.S. 30-year Government Bonds yield was 5.272%, the highest since 2007. Brent, the global oil benchmark, settled at $94.65 per barrel, up 4.6% from the previous session, while West Texas Intermediate (WTI) rose 5.2% to $90.22 per barrel.
The dollar is also strengthening as the likelihood of a rate hike by the Federal Reserve (Fed) rises. Market participants are leaning toward a rate increase after Fed Chair Kevin Warsh said that if inflation does not quickly approach the target, "there is work to do." When the United States raises rates, Asian currency such as the won tends to weaken.