On the 20th, foreign exchange dealers in the Seoul foreign exchange market forecast the dollar-won exchange rate would rise to the 1,480 won range but remain range-bound with limited upside. Middle East geopolitical risks intensified as the US Central Command announced on the 17th (local time) that it conducted airstrikes on Iran for the seventh consecutive day, while semiconductor stock sell-offs continued to exert upward pressure on the exchange rate. However, persistent dollar supply from SK Hynix ADR listing-related conversion demand and ongoing heavy industry dollar sales are expected to cap gains. The New York NDF market priced the 1-month dollar-won contract at 1,487.15 won (MID), implying a 9.50 won increase from the previous Seoul spot close of 1,478.50 won after adjusting for the 1-month swap point of -0.85 won.
US Central Command Conducts Seventh Consecutive Day of Airstrikes on Iran
The US Central Command posted on X on the 17th (local time) that it conducted airstrikes on Iran at 3 p.m. Eastern Time, marking the seventh consecutive day of such operations. West Texas Intermediate (WTI) crude oil for August delivery rose to the $83-84 per barrel range, reflecting heightened Middle East tensions.
SK Hynix ADR Demand and Heavy Industry Sales Limit Dollar-Won Upside
Despite upward pressure from geopolitical risks and semiconductor stock weakness, dollar supply factors remain dominant in the Seoul market. Conversion demand related to SK Hynix's US American Depositary Receipt (ADR) listing continues to await execution, while heavy industry companies have maintained dollar sales in recent sessions. These supply-side dynamics are expected to weigh on the exchange rate's upper range.
Three Bank Dealers Forecast Dollar-Won Range Between 1,480-1,496 Won
A dealer at Bank A stated that the exchange rate rose more than expected during the holiday due to renewed US-Iran tensions, and noted that authorities remain vigilant around the 1,500 won level. The dealer forecast a range-bound market centered around 1,490 won, with a predicted range of 1,482.00-1,495.00 won. A dealer at Bank B highlighted that oil prices rose due to Middle East tensions and investor sentiment weakened, but foreign stock rebalancing has recently subsided and SK Hynix ADR inflows remain a won-supportive factor. The dealer forecast a range of 1,480.00-1,495.00 won. A dealer at Bank C attributed upward pressure to risk-off sentiment driven by Middle East uncertainty and semiconductor stock corrections, particularly affecting Samsung Electronics and SK Hynix, but noted that heavy industry inflows over the past two weeks and Hynix ADR conversion demand maintain dollar supply dominance. The dealer forecast a range of 1,483.00-1,496.00 won. The consensus forecast range for the day was 1,480.00-1,495.00 won.
FAQ
What caused the dollar-won exchange rate to rise on the 20th?
The dollar-won exchange rate rose due to intensified Middle East geopolitical risks, specifically the US Central Command's announcement of airstrikes on Iran for the seventh consecutive day on the 17th (local time), and ongoing semiconductor stock sell-offs. WTI crude oil rose to $83-84 per barrel reflecting these tensions.
Why is the dollar-won exchange rate expected to remain range-bound despite upward pressure?
Despite geopolitical risks and semiconductor weakness, persistent dollar supply from SK Hynix ADR listing-related conversion demand and ongoing heavy industry dollar sales are expected to limit upside. Authorities also remain vigilant around the 1,500 won level, contributing to range-bound trading expectations.
What dollar-won exchange rate ranges did Seoul dealers forecast for the 20th?
Three bank dealers forecast ranges of 1,482.00-1,495.00 won (Bank A), 1,480.00-1,495.00 won (Bank B), and 1,483.00-1,496.00 won (Bank C), with a consensus forecast range of 1,480.00-1,495.00 won for the trading day.
