The won-dollar exchange rate finished weekly transactions at 1,368.7 won at 3:30 p.m. on the 2nd. It fell 1.7 won (0.12%) from the prior weekly closing transaction. It dipped back into the 1,360-won range in a day after touching the 1,360s on the 31st for the first time in 13 months and then rising into the 1,370s the next day.
The rate stood at 1,373.5 won at 9 a.m. This was up 3.1 won from the previous weekly close. But as the decline deepened, it fell to as low as 1,365.9 won around 3:17 p.m. The intraday high was 1,375 won at 8:10 a.m.
The rate moved contrary to market expectations that it could climb into the 1,380s. Even as the dollar strengthened with the United States and Iran resuming mutual airstrikes, heavy dollar selling by major export corporations appeared to have a bigger impact. When corporations sell dollars, greenbacks become more plentiful in the Seoul foreign exchange market, pushing the rate down.
Dollar selling by corporations is typically done at month-end and is seen as a seasonal factor. Recently, however, more frequent dollar selling is said to be pulling the rate lower. This explains why the rate is falling even as the likelihood of a U.S. benchmark rate hike has increased and the Japanese yen is weak.
Still, unresolved conflict in the Middle East is lifting international oil prices, weighing on the rate. Another reason the decline is limited is that lower rates spur more buying demand from those looking to purchase dollars on the cheap. As the domestic stock market corrected, the increase in "Seohak ants" seeking to invest in U.S. equities is a factor pushing the rate higher.