The Korean won-U.S. dollar exchange rate extended its decline for a third consecutive session, though the drop was cushioned by dollar demand linked to foreign investors' net selling of Korean stocks and bargain-hunting buying.
The won-dollar exchange rate closed daytime trading at 1,454.0 won on Tuesday in the Seoul foreign exchange market, down 1.1 won from the previous session.
The rate opened at 1,448.6 won, continuing its downward trend for a third day. Overnight, U.S. President Donald Trump said in a media interview that he had "very good discussions with Iran over the past 24 hours" and that "a deal is very likely," fueling expectations of easing Middle East tensions.
During the session, the won-dollar rate came under downward pressure as the dollar-yen rate dropped into the 156 yen range. However, much of the decline was reversed in late trading.
Market participants attributed the support at the lower end of the rate to reactive dollar buying following the recent sharp fall in the exchange rate, as well as settlement demand tied to foreign investors' net selling of Korean equities.
"With the exchange rate falling significantly in recent sessions, some bargain-hunting buying has emerged," a foreign exchange market official said. "Foreign stock fund flows are likely to drive the direction of the exchange rate."
Meanwhile, the KOSPI closed at 7,490.05, up 105.49 points, or 1.43%, from the previous session. The KOSPI had surged more than 6% the previous day, crossing the 7,000 mark for the first time in history.
