Won-Dollar Exchange Rate Surges to 1,370 Won Amid Oil Price Spike

The won-dollar exchange rate broke through the 1,370 won level for the first time in two weeks due to rising oil prices and inflation concerns. As of March 16th at 3:30 p.m., the exchange rate stood at 1,368.6 won, up from the previous day's close.

The surge in Middle East oil prices pushed West Texas Intermediate (WTI) futures above $100 per barrel, while Brent crude futures rose to $105.68 per barrel. This has reignited concerns over U.S. inflation and prompted market participants to expect a strengthening dollar.

Market researchers Min Kyung-won from Woori Bank and Choi Kyu-ho from Hanwha Investment & Securities both agree that inflation is the critical variable driving the exchange rate's trajectory. They note that if high oil prices persist, they could push up goods prices, transportation costs, and production costs, ultimately feeding back into services inflation.

While some observers see the won-dollar exchange rate trading in the mid-to-upper 1,300 won range for the near term, others believe the possibility of breaking above 1,370 won and approaching 1,400 won cannot be dismissed. The fading effect of domestic dollar supply is also supporting the exchange rate's upward momentum.