The USD-KRW exchange rate closed at 1,480.10 won in the Seoul foreign exchange market, up 6.70 won from the previous trading day's close of 1,473.40 won, marking its first upward close in Seoul trading in seven sessions. The currency pair rose in response to Middle East geopolitical risks that strengthened the dollar and weakened the yen. US Central Command stated it continued airstrikes on Iran for the 11th day, while Iranian military warned that attacks on nuclear facilities would escalate the war. The exchange rate movement reflected heightened regional tensions as US Secretary of State Marco Rubio warned at the ASEAN Foreign Ministers' Meeting in the Philippines that Iranian control of the Strait of Hormuz would set a dangerous precedent with repercussions beyond the Middle East.
US Central Command Continues Iran Airstrikes for 11th Day
US Central Command announced on X that it continued airstrikes on Iran for the 11th consecutive day. Iranian military issued a warning that war would escalate if US forces attacked nuclear facilities. US Secretary of State Marco Rubio stated at the ASEAN Foreign Ministers' Meeting in the Philippines that Iranian control of the Strait of Hormuz would create a dangerous precedent with impacts extending beyond the Middle East. Rubio said the US remains open to diplomatic dialogue with Iran but assessed that Iran's attitude is not serious. Brent crude oil futures rose to $92 per barrel, the highest level since the 11th of the previous month.
Foreign Investors Net Purchase 3.4 Trillion Won in Korean Stocks
Foreign investors net purchased approximately 3.4 trillion won in Korean stocks across KOSPI, KOSDAQ, and NextTrade combined, limiting the extent of the exchange rate's rise. KOSPI surged more than 6% during morning trading but reduced gains to below 1% as the session progressed. SK Hynix's American Depositary Receipt (ADR) conversion volume expected to continue through the following month and export company negotiations supplied dollars to the foreign exchange market. Import companies' payment demands also contributed to upward pressure on the exchange rate.
Vice Finance Minister Heo Jang Meets Major Export Companies
Vice Finance Minister Heo Jang met with officials from major export companies including Samsung Electronics, SK Hynix, Hyundai Motor and Kia, HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries on the previous day. According to a press release distributed by the Ministry of Economy and Finance, Heo stated that "foreign currency supply and demand in the second half will improve further based on the solid fundamentals of our economy, including continued semiconductor strength." He requested that companies "play an active role in converting export proceeds and foreign currency deposits, and expanding the domestic inflow of overseas retained funds, considering the changed foreign exchange market conditions."
Dollar-Yen Trades in 163 Yen Range at 40-Year Low
The dollar-yen exchange rate, which hit a 40-year low, traded in the 163 yen range throughout the Asian session. Japanese Finance Minister Satsuki Katayama emphasized at a press conference that Japan is "prepared to take decisive action in the foreign exchange market if necessary." A foreign bank forex dealer stated that "the level is low, so there was a lot of payment demand, which caused the rise in the morning," adding that "it seems SK Hynix ADR volume is still there, so it seems they kept pushing it down whenever the exchange rate rose." The dealer noted that "strong foreign net stock purchases put downward pressure on the exchange rate."
China's PBOC Devalues Yuan in Daily Fix
The People's Bank of China (PBOC) set the dollar-yuan trading reference rate at 6.7933 yuan in the morning, up 0.0016 yuan (0.02%) from the previous session. The Bank of Korea will release preliminary second-quarter GDP figures at 8:00 AM on the 23rd. The Monetary Policy Committee (non-rate decision meeting) will convene at 10:00 AM. The intraday high was 1,484.30 won and the low was 1,477.90 won, with a fluctuation range of 6.40 won. The Market Average Rate (MAR) will be set at 1,480.90 won. In the currency futures market, foreigners net sold approximately 8,000 dollar futures contracts. Spot forex trading volume totaled $14.377 billion combined across Seoul Money Brokerage and Korea Money Brokerage. KOSPI closed up 0.74%. Foreigners net purchased 2.4220 trillion won in the securities market and net sold 87.1 billion won in the KOSDAQ market. The dollar index stood at 101.146. The dollar-yen rate was 163.106 yen, down 0.031 yen from the previous session. The euro-dollar rate was 1.1407 dollars, up 0.00112 dollars. The yen-won redenominated rate rose 4.11 won to 907.20 won per 100 yen. The offshore dollar-yuan (CNH) rate rose to 6.7739 yuan. The yuan-won direct trading rate rose 0.93 won to 218.55 won. The intraday high was 219.13 won and the low was 218.37 won. Trading volume reached 42.647 billion yuan.
FAQ
What caused USD-KRW to rise to 1,480.10 won?
The USD-KRW exchange rate rose 6.70 won to close at 1,480.10 won due to Middle East geopolitical risks, including the 11th consecutive day of US airstrikes on Iran and warnings from Iranian military about escalation if nuclear facilities are attacked. The tensions strengthened the dollar and weakened the yen, which the Korean currency tracked.
How much did foreign investors purchase in Korean stocks?
Foreign investors net purchased approximately 3.4 trillion won in Korean stocks across KOSPI, KOSDAQ, and NextTrade combined. In the securities market specifically, foreigners net purchased 2.4220 trillion won while net selling 87.1 billion won in the KOSDAQ market.
What did Vice Finance Minister Heo Jang request from export companies?
Vice Finance Minister Heo Jang met with officials from major export companies including Samsung Electronics, SK Hynix, Hyundai Motor and Kia, HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries. He requested that companies play an active role in converting export proceeds and foreign currency deposits, and expanding the domestic inflow of overseas retained funds, considering the changed foreign exchange market conditions.
