The won-dollar exchange rate fell below the 1,500 won level, declining in both regular trading and after-hours extended trading. The drop was driven by easing geopolitical tensions and shifting monetary policy expectations among major economies, which combined to weaken the dollar.
On the Seoul foreign exchange market on Wednesday, the won-dollar exchange rate closed regular trading at 1,504.2 won, down 2.1 won from the previous day. The rate then extended its decline in after-hours trading, breaking below 1,500 won. As of 6:10 p.m., the rate stood at 1,496.9 won. This marked the lowest intraday level since March 25.
Expectations for easing Middle East risks underpinned the rate's decline. The possibility of Pakistan mediating to defuse military tensions between the United States and Iran raised hopes for a cessation of hostilities, pushing down the dollar's value. This applied downward pressure on the won-dollar exchange rate.
Monetary policy developments among major economies also supported dollar weakness. The euro strengthened as markets priced in expectations that the European Central Bank (ECB) would raise interest rates this month, causing the dollar to weaken in relative terms.