This photo, taken Monday, shows the trading room of Hana Bank in central Seoul as the South Korean won fell to a 17-year low against the U.S. dollar amid heightened tensions in the Middle East. Photo by Yonhap
The South Korean currency fell to a 17-year low against the U.S. dollar Monday as global oil prices surged amid heightened tensions in the Middle East.
The won was quoted at 1,497.5 per dollar at 3:30 p.m., down 3.8 won from the previous session, marking its weakest level since March 10, 2009, when the won hit 1,511.1 during the global financial crisis.
The won opened at 1,501 per dollar Monday, breaching the significant psychological and technical barrier of the 1,500 won mark for the first time in regular trading hours since March 2009.
The currency later trimmed its losses and fluctuated in the upper 1,490 won range before ending the session with a modest decline.
The won’s weakness came as global oil prices rose to a multi-year high, with U.S. President Donald Trump suggesting the conflict with Iran could last several more weeks and calling on the international community to help reopen the Strait of Hormuz to oil tankers.
Brent crude, the global benchmark, rose 2.9 percent to about $106.12 a barrel on Sunday (U.S. time). U.S. oil also rose to over $100.
The conflict has entered its third week, causing serious disruptions to global oil supplies.
The Strait of Hormuz, a key waterway controlled by Iran, has been effectively shut since the start of the U.S.-Israeli strikes on Iran earlier this month.
“Fears of a prolonged conflict are fueling a sharp rise in oil prices and strengthening the dollar,” Park Sang-hyun, an analyst at iM Securities, said. “If high oil prices persist due to growing uncertainty over the situation, the won is likely to settle around the 1,500 won level.”
The domestic foreign exchange and stock markets have shown high volatility since last week amid heightened geopolitical tensions.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 62.61 points, or 1.14 percent, to 5,549.85 Monday, ending a two-day losing streak, led by gains of large-cap tech shares.
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