The USD/KRW exchange rate closed at 1,497.50 won at 6am, down 5.90 won from the previous 3:30pm Seoul close of 1,503.40 won, as US-Iran conflict intensified. US President Donald Trump announced via Truth Social he would reinstate Iran blockade measures and collect 20% compensation on all cargo from ships passing through the Hormuz Strait. Iran's Central Command warned it would "respond firmly" and "not allow US intervention." Fed Governor Christopher Waller stated that if core inflation remains high this week, the FOMC "should consider tightening monetary policy in the near future," adding dollar strength pressure. The movements reflected escalating Middle East geopolitical tensions and potential shifts in US monetary policy.
USD/KRW Reaches Intraday Low of 1,491.80 Won During London Trading
The exchange rate fell 1.0 won compared to 24 hours earlier at 6am the previous day (1,498.50 won). During London trading the previous day, USD/KRW dropped to an intraday low of 1,491.80 won, showing won strength. The decline followed Hanwha Ocean's $2 billion forward exchange sale. News emerged that Qatar, Oman, and Pakistan continued mediation efforts between the US and Iran. The rate maintained the early-to-mid 1,490 won range during London trading hours.
Trump Announces Iran Blockade Reinstatement and Hormuz Strait Compensation Measures
During New York trading, the exchange rate faced upward pressure following President Trump's statement. Trump said via Truth Social he would reinstate Iran blockade measures and receive compensation at a rate of 20% of all cargo from ships passing through the Hormuz Strait. Iran's Central Command, which oversees unified military operations, issued a statement warning: "We will not allow the US to intervene in the Hormuz Strait" and "will respond firmly." US Central Command, which oversees Middle East military operations, announced at approximately 6:10am that it initiated a third consecutive night of airstrikes against Iran. Trump had previously stated regarding Iran: "We will hit them very hard tonight, and we will hit them hard tomorrow."
Fed Governor Waller Signals Potential Policy Tightening on High Inflation
Fed Governor Christopher Waller's hawkish remarks fueled dollar strength. Waller stated in a speech: "If core inflation comes in high again this week, the FOMC should consider tightening monetary policy in the near future." The dollar index, which had broken below the 101 level during London trading, rebounded to the 101.2 level. The dollar index stood at 101.272, up 0.318 points from the previous day.
Dollar Index Rises to 101.272 as USD/JPY Climbs to 162 Yen Range
USD/JPY rose back to the 162 yen range, creating negative pressure on the won. News emerged that Japan has no immediate plans to change the target asset allocation of its Government Pension Investment Fund (GPIF). According to reports, GPIF is considering expanding investments in domestic Japanese assets within the existing permitted range. Finance Minister Katayama Satsuki stated that pension funds including GPIF would be encouraged to make "much more investment" in Japanese financial assets. Chief Cabinet Secretary Kihara Minoru said GPIF routinely reviews its portfolio and "if adjustments are deemed necessary, the portfolio will be changed." SK Hynix's American Depositary Receipt (ADR) plunged 9.32%. USD/JPY rose 0.631 yen to 102.359 yen. EUR/USD fell 0.00328 dollars to 1.13810 dollars. Offshore USD/CNH rose 0.0016 yuan to 6.7835 yuan.
FAQ
What was the USD/KRW closing rate at 6am?
The USD/KRW exchange rate closed at 1,497.50 won at 6am, down 5.90 won from the previous trading day's 3:30pm Seoul close of 1,503.40 won.
What did Trump announce regarding the Hormuz Strait?
Trump stated via Truth Social that he would reinstate Iran blockade measures and collect compensation equivalent to 20% of all cargo from ships passing through the Hormuz Strait. Iran's Central Command warned it would "respond firmly" and "not allow US intervention in the Hormuz Strait."
What did Fed Governor Waller say about monetary policy?
Fed Governor Christopher Waller stated in a speech: "If core inflation comes in high again this week, the FOMC should consider tightening monetary policy in the near future."
