Seoul: The South Korean won weakened against the U.S. dollar Monday as U.S. President Donald Trump ordered a blockade of all ships entering or leaving the Strait of Hormuz after high-stakes peace talks with Iran failed to make a breakthrough. The won closed at 1,489.3 per dollar, down 6.8 won from the previous session's close.
According to Yonhap News Agency, the decline came after the United States and Iran concluded marathon talks in Islamabad on Saturday (U.S. time) without reaching an agreement. The meeting was the first since a two-week ceasefire was reached last week. Following the breakdown in talks, Trump announced that the U.S. military would enforce a blockade on all vessels attempting to enter or exit the crucial waterway starting Monday. This move has pushed global oil prices higher amid concerns over further supply disruptions.
The currency has shown heightened volatility in recent sessions, in line with developments in the Middle East conflict that began in late February. Rising oil prices have fueled concerns over inflation and a potential economic slowdown, exerting pressure on the won by increasing demand for dollars for crude imports as South Korea relies heavily on imports for energy.
The dollar index, which measures the value of the U.S. dollar against a basket of six major currencies, rose 0.39 percent to 99.04. Amid these uncertainties, the benchmark Korea Composite Stock Price Index (KOSPI) fell 0.86 percent to 5,808.62 Monday, partly weighed down by heavy foreign selling.