Won Weakens as Safe-Haven Dollar Demand Rises on Iran-US Truce Lapse
The South Korean won weakened against the US dollar on August 18, as investors sought safe-haven assets following the lapse of the Iran-US truce deadline. The exchange rate stood at 1,415 won per dollar at 9 a.m., down 3.3 won (0.23%) from the previous session's closing price.
Market participants expect the exchange rate to potentially rise today, as buying dollars on the cheap has increased due to the recent sharp decline in July. Some analysts also noted that the rate tends to fall in the morning and rebound higher in the afternoon during weekly transactions.
The expiration of the truce deadline is expected to increase demand for the safe-haven dollar, pushing the exchange rate higher. The temporary truce ended, causing international oil prices to rise and US stocks to fall. On August 17, the Standard & Poor's (S&P) 500 index fell 0.52% from the previous session, while the Nasdaq composite index fell 0.32%. Brent crude futures rose 2.7% to $90.87 a barrel.