Seoul, April 6 (SocialNews.XYZ) The South Korean won weakened against dollar on Monday after US President Donald Trump renewed threats to strike Iranian energy facilities and bridges if the Strait of Hormuz is not reopened, while setting a new deadline for action.
The won closed at 1,506.3 per dollar, down 1.1 won from the previous session, reports Yonhap news agency.
The local currency opened at 1,510.3 won on Monday, but some of the earlier losses were pared on news reports that the United States and Iran were discussing a potential 45-day ceasefire as part of a two-phase deal that could eventually lead to a permanent end to the war.
The currency has shown heightened volatility in recent sessions, remaining below the psychologically important 1,500 won level, as the war in the Middle East that began late February has driven up global oil prices, fuelling concerns over inflation and a potential economic slowdown.
On Sunday (US time), Trump said Iran would "be living in hell" if it fails to reopen the crucial waterway, extending his deadline for a deal by one day to 8 p.m. Tuesday.
Escalating tensions further lifted crude prices amid supply concerns, with Brent and West Texas Intermediate (WTI) climbing above US$110 per barrel.
Higher oil prices have pressured the won by increasing demand for dollars for crude imports, as South Korea relies heavily on imports for energy.
"Even if the United States and Iran reach a deal, high oil prices are likely to persist during the first half, keeping the local currency at around the 1,500 won level," Moon Jeong-hee, an economist at KB Kookmin Bank, said.
Despite the instability in the Middle East, the benchmark Korea Composite Stock Price Index (KOSPI) rose 1.36 percent to 5,450.33 Monday on solid buying by institutions.
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz