The South Korean won experienced a significant strengthening against the US dollar on Friday, marking a notable rebound after its sharp decline in the preceding session. This positive movement was largely attributed to emerging signs of progress in discussions surrounding the reopening of the crucial Strait of Hormuz, offering a glimmer of hope amidst the protracted Middle East conflict.
The currency began trading at 1,510.8 won per US dollar, reflecting an appreciation of 8.9 won compared to its closing rate in the prior session.
Despite the won’s gains, investor sentiment remained cautious due to persistent and escalating tensions across the Middle East. Concerns intensified following US President Donald Trump’s prime-time address on Wednesday, where he stated the United States intended to strike Iran “extremely hard over the next two to three weeks” and “bring them back to the Stone Age,” without offering a clear timeline for de-escalation or conflict resolution.
Such hawkish rhetoric significantly dimmed prospects for a rapid resolution to the ongoing month-long regional conflict. This prolonged instability has already driven up global oil prices due to considerable supply disruptions, further fueling widespread fears of rising inflation and a potential slowdown in economic growth worldwide.
However, a contrasting development emerged as Iran’s Deputy Foreign Minister, Kazem Gharibabadi, announced that Tehran is actively drafting a protocol with Oman to oversee maritime traffic through the critical Strait of Hormuz. This declaration ignited fresh optimism for tangible progress in the reopening of the strategic waterway, which has remained largely inaccessible since the conflict commenced in late February.
In broader currency markets, the US dollar index, which benchmarks the greenback’s value against a basket of six other major global currencies, notably retreated to 99.959. This decline followed an earlier surge to 100.258, observed immediately after President Trump’s address.
Mirroring the improved sentiment, the benchmark Korea Composite Stock Price Index (KOSPI) recorded a significant rise of 3.3 percent, reaching 5,406.75 within the initial 15 minutes of Friday’s trading session.
