The USD/KRW exchange rate fell 1.60 won to 1,499.80 won at 9:05 AM on May 13 in the Seoul foreign exchange market, compared to the previous trading day's Seoul close. The decline occurred despite escalating US-Iran military tensions, as improved supply-demand expectations exerted stronger downward pressure on the rate. The exchange rate opened at 1,498.50 won at 6:13 AM on May 13, marking the start of the week's trading. The US Central Command announced additional strikes on Iran beginning at 5 PM Eastern Time on May 12, stating the action aimed to continue neutralizing Iran's ability to attack civilian mariners and commercial vessels in the Strait of Hormuz. Brent crude oil prices rose over 3% following the announcement, though market participants showed limited sensitivity to the geopolitical developments due to repeated fluctuations in US-Iran conflict intensity.
US Central Command Launches Additional Strikes on Iran on May 12
The US Central Command posted on X at 5 PM Eastern Time on May 12 that additional strikes on Iran had commenced. The command stated the action was "a measure to continue neutralizing Iran's ability to attack civilian mariners and commercial vessels freely transiting the Strait of Hormuz." The statement added that "this strike was conducted under the direction of the Commander-in-Chief (President) to hold the Iranian military accountable." Brent crude oil prices increased over 3% in response to the announcement. Market participants displayed muted reactions to the escalation, as the conflict intensity between the two nations has fluctuated repeatedly in recent periods.
SK Hynix to Convert $26.5 Billion ADR Proceeds Sequentially
SK Hynix listed American Depositary Receipts (ADR) on NASDAQ on May 10, raising $26.5 billion in proceeds. The company plans to convert the funds sequentially into Korean won. Heavy industry companies are also estimated to be consistently selling forward foreign exchange contracts. Verbal interventions by foreign exchange authorities have acted as a limiting factor on exchange rate increases.
Regional Forex Rates Show Mixed Movements on May 13
The dollar index stood at 101.070 at the same time. The USD/JPY exchange rate rose 0.176 yen from the previous session to 161.919 yen. The EUR/USD exchange rate fell 0.00118 dollars to 1.14028 dollars. The JPY/KRW re-arbitrage rate declined 0.15 won to 926.30 won per 100 yen. The CNY/KRW exchange rate dropped 0.44 won to 220.93 won. The offshore USD/CNH exchange rate rose to 6.7836 yuan.
Foreign investors' rebalancing-related stock selling remained relatively subdued on May 13. The KOSPI fell 0.33% in early trading. Foreign investors net sold approximately 25 billion won in the securities market and 60 billion won in the KOSDAQ market.
FAQ
What caused the USD/KRW exchange rate to fall on May 13?
The USD/KRW exchange rate fell 1.60 won to 1,499.80 won at 9:05 AM on May 13 due to improved supply-demand expectations, which outweighed the impact of escalating US-Iran military tensions. SK Hynix's planned sequential conversion of $26.5 billion in ADR proceeds raised on May 10 and consistent forward foreign exchange contract sales by heavy industry companies contributed to the downward pressure.
How did US-Iran tensions affect the forex market on May 13?
The US Central Command announced additional strikes on Iran beginning at 5 PM Eastern Time on May 12, causing Brent crude oil prices to rise over 3%. However, the USD/KRW exchange rate declined despite the geopolitical escalation, as market participants showed limited sensitivity due to repeated fluctuations in the conflict intensity between the two nations.
What were the regional forex rates on May 13?
At 9:05 AM on May 13, the dollar index stood at 101.070. The USD/JPY exchange rate was 161.919 yen, up 0.176 yen from the previous session. The EUR/USD exchange rate was 1.14028 dollars, down 0.00118 dollars. The JPY/KRW rate was 926.30 won per 100 yen, down 0.15 won. The CNY/KRW rate was 220.93 won, down 0.44 won. The offshore USD/CNH rate rose to 6.7836 yuan.
