Won strengthens on hopes for imminent US-Iran ceasefire deal, closing at 1,518.30 per dollar

By Jung Yoon-hee, The Herald Business

The won strengthened against the dollar in overnight trading Friday as expectations spread that the United States and Iran are nearing a ceasefire agreement. With the dollar-won rate having held above 1,500 won for an extended period, attention is turning to whether the exchange rate will stabilize.

The dollar-won rate closed at 1,518.30 won at 2 a.m. Saturday (Korean Standard Time), down 10.60 won from the previous Seoul foreign exchange market closing price. Compared with the daytime session close of 1,519.80 won, the rate fell 1.50 won.

Donald Trump said Friday that a ceasefire deal between the United States and Iran had been finalized and only required signing. Some media outlets subsequently reported that the two sides could sign a memorandum of understanding in Geneva, Switzerland, on Sunday.

Iranian media, however, rebuffed those reports, calling a Sunday signing ceremony "completely false." They also said the draft memorandum of understanding did not include provisions on control of the Strait of Hormuz or nuclear issues.

After those reports emerged from Iran, Trump pushed back on his Truth Social account, saying Iran "better get its act together fast" and that "the conditions leaked to the fake news have nothing to do with the conditions agreed to in writing." He also reposted a statement by Iranian Foreign Minister Abbas Araghchi, who said the signing of a memorandum of understanding was closer than ever.

With both Trump and the Iranian foreign minister signaling that a ceasefire deal is imminent, markets broadly concluded that the signing of a memorandum of understanding is indeed drawing near. Risk aversion eased as a result, and the dollar-won rate extended its decline slightly further in New York trading.

Caution persists, however. Trump said a signing ceremony with Iran could take place this weekend or by Monday, but separate reports cited a senior US official as saying the probability of a deal being reached was "80 to 85 percent, but not 100 percent."

Around 3:11 a.m. Saturday, the dollar-yen rate stood at 160.211 yen and the euro-dollar rate was at $1.15746. The offshore dollar-yuan rate moved at 6.7623 yuan. The yen-won cross rate was 948.58 won per 100 yen, while the offshore yuan-won rate traded at 224.70 won.

For the full session, the intraday high for the dollar-won rate was 1,523.80 won and the intraday low was 1,515.20 won, a range of 8.60 won.

Total spot foreign exchange trading volume for the session, including overnight trading and combining figures from Seoul Money Brokerage Services and Korea Money Brokerage Corp., came to $12.062 billion.