Seoul: The South Korean won strengthened against the U.S. dollar Tuesday, reaching its highest level in about a month amid expectations that Washington and Tehran may resume talks following their recent ceasefire. The won closed at 1,481.2 per dollar, up 8.1 won from the previous session, marking its strongest level since March 12.

According to Yonhap News Agency, the gain came after foreign media reported that the United States and Iran could resume peace talks after their round of negotiations in Islamabad over the weekend ended without a breakthrough. Following the breakdown in talks, U.S. President Donald Trump ordered a blockade on vessels attempting to enter or exit the crucial Strait of Hormuz, which took effect Monday (U.S. time). Trump also told reporters that "the right people" in Iran had reached out to his administration and wanted "to work a deal."

Iranian President Masoud Pezeshkian said the country is prepared to continue talks within the framework of international law and regulations, according to media reports. Signs of a possible resumption of talks helped push global oil prices below US$100.

Foreign investors' net purchase of local stocks also helped strengthen the won. They bought a net 840.88 billion won ($568.57 million) worth of local shares on Tuesday, helping lift the benchmark Korea Composite Stock Price Index (KOSPI) by 2.74 percent to 5,967.75.

The Korean won has shown heightened volatility in recent sessions, in line with developments in the Middle East conflict that began late February, as rising oil prices have fueled concerns over inflation and a potential economic slowdown. Higher oil prices have pressured the won by increasing demand for dollars for crude imports as South Korea relies heavily on imports for energy.

The dollar index, which measures the value of the U.S. dollar against a basket of six major currencies, fell 0.01 percent to 98.36.