SEOUL, Mar 16: The South Korean won fell to a 20-month low against the dollar ahead of the Federal Reserve’s policy meeting this week and growing expectations for an early rise in U.S. interest rates.
The won fell as low as 1,136.6 per dollar, its weakest since July 10, 2013. It was last quoted at 1,134.0 as of 0335 GMT, compared with the previous close at 1,128.5. ‘The won fell in line with many of its regional peers as expectations remain high that some signals will come out this week after the (Fed’s) meeting,’ An Ki-tae, an economist at NH Investment & Securities.
Many analysts suspect the Fed will lay the groundwork for a move as soon as mid-year at this week’s two-day policy review beginning on Tuesday.
The won has been on a steadily falling trend since late January on talk of U.S. interest rate hikes and as the local economy’s recovery turns out to be weaker than expected. On the stock market, the benchmark Korean Composite Stock Price Index (KOSPI) was up 0.14 percent at 1,988.59 points as of 0335 GMT, despite a small amount of net sales by foreign investors during the morning. Export companies, including Samsung Electronics and Hyundai Motor led gains, underpinned by hopes the won’s recent decline and low oil prices will help boost their earnings in the coming months. ‘Heavyweights such as Samsung and Hyundai rose this morning on hopes for an export recovery aided by the weakened local currency,’ said Gwak Hyun-su, an analyst at Shinhan Investment, adding their gains were partly offset by losses of shipbuilding and energy shares.
Samsung rose 1.17 percent and Hyundai gained 2.03 percent, whereas SK Innovation and S-OIL dropped by around 4 percent each.
Investors shrugged off the findings from a private-sector survey showing the country’s 30 biggest business conglomerates will increase investment by 16.5 percent this year from last year.
(AGENCIES)
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