Won-dollar exchange rate breaks through 1,500… first time in 17 years since the financial crisis

The won-dollar exchange rate has surpassed the 1,500-won level for the first time in 17 years. The move reflects a confluence of headwinds, including oil-market jitters amid the Iran war and broad-based dollar strength.

On the 19th in Seoul’s foreign exchange market, the won finished the onshore session (as of 3:30 p.m.) at 1,501 per dollar, up 17.9 won from the previous day. While the intraday rate has recently breached 1,500, this marks the first close above the 1,500 level—widely seen as a “psychological resistance level”—since March 10, 2009 (1,511.5), when the global financial crisis was unfolding.

The won opened up 21.9 won at 1,505.0 per dollar, also the highest since March 10, 2009 (intraday peak of 1,561.0). It later slipped to 1,494.5 around 11:34 a.m. before paring losses as the upswing regained momentum.

The rally in the exchange rate was fueled by a renewed surge in global oil prices as the Iran war intensified. Brent, the international benchmark, briefly rose above $110 a barrel, extending its run of five consecutive sessions in triple digits. West Texas Intermediate (WTI) also neared $100.

Adding to the dollar’s strength, the U.S. Federal Reserve (Fed) on the 18th (local time) held its policy rate steady and, citing inflation concerns linked to rising oil prices, signaled the possibility of further hikes. The dollar index, which tracks the greenback against six major currencies, has climbed back above the 100 level.