Seoul: The South Korean currency finished below the 1,500 won level against the U.S. dollar for the second consecutive day Friday, as geopolitical tensions stemming from the Iran crisis continued to weigh on investor sentiment and drive demand for the dollar. The won was quoted at 1,500.6 per dollar, up 0.4 won from the previous session.
According to Yonhap News Agency, the currency opened markedly stronger at 1,492 won Friday, rebounding from the 17-year low of 1,501 won per dollar the previous session, but slimmed its gains to finish below the psychologically and technically critical 1,500 won threshold. It marked the first time since March 9, 2009, that the won has remained below the 1,500 won level for two consecutive sessions. Thursday's level was the weakest since March 10, 2009, when it hit 1,511.1 during the global financial crisis.
There have been guarded hopes for easing tensions in the Middle East, after U.S. President Donald Trump told reporters Thursday (U.S. time) that he was "not putting troops anywhere" when asked about the possibility of deploying ground forces. Israeli Prime Minister Benjamin Netanyahu also said Israel would refrain from further attacks on Iranian energy facilities, while claiming that Iran no longer has "the capacity to enrich uranium," according to foreign media reports.
Following the remarks, the dollar index, which measures the greenback against six major currencies, briefly fell below the 99 level, but rebounded to 99.473 as of 3 p.m. Friday. Foreigners' net selling of local stocks also contributed to the currency's weakness. On the main bourse, offshore investors offloaded a net 2.65 trillion won worth of shares.
Despite foreign selling, the benchmark Korea Composite Stock Price Index (KOSPI) added 0.31 percent to close at 5,781.2, supported by buying from retail and institutional investors. South Korea's foreign exchange and stock markets have shown heightened volatility since the beginning of the conflict earlier this month, as the country remains heavily dependent on energy imports.