Trump 'TACO'... FX rate plunges 26.4 won in a single day [Hankyung FX Market Watch]

The won-dollar exchange rate plunged more than 26 won after U.S. President Donald Trump said he had moved to hold back-channel talks with Iran.

On the 24th in the Seoul FX market, the won-dollar exchange rate opened at 1,490.9 won, down 26.4 won from the previous session. As of 9:41 a.m., it was trading at 1,406.7 won.

As recently as the day before, the won-dollar rate had surged to nearly 1,520 won as tensions over the war in the Middle East peaked. With one day left until President Trump's "ultimatum" deadline, worst-case uncertainty weighed on the FX market.

However, around 8 p.m. the previous evening, President Trump abruptly announced that back-channel talks with Iran were under way and that attacks on Iran's power plant facilities would be suspended for five days, triggering a sharp reversal. As expectations for an end to the war spread, the won-dollar exchange rate fell to as low as 1,480.5 won the previous day. Moon Kyung-won, an analyst at Woori Bank, said, "Dollar selling by exporters to lock in highs will also likely drive the exchange rate lower today," adding, "However, considering Iran's stance, which has denied the talks themselves, the won-dollar exchange rate is likely to fluctuate in the high 1,480 won range today."

Sim Seong-mi, smshim@hankyung.com