Foreign exchange
Korean won rebounds to pre-pandemic level; more gains seen until US election
By Sep 18, 2020 (Gmt+09:00)
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The South Korean won leapt to its highest close in eight months against the dollar on Sept. 18, powered by foreign investors’ week-long stock buying and the Chinese yuan’s rally.
The local currency is expected to continue its upward run through the Nov. 3 US presidential election, with the Federal Reserve’s commitment to ultra-low interest rates likely to boost investors’ risk appetite, analysts said.
The won closed at 1,160.3 per dollar, just off the intraday high of 1,160.2, versus Thursday’s finish at 1,174.4.
It marked the strongest finish since the 1,159.1 touched on Jan. 20 before the coronavirus broke out, and the biggest daily gain since Mar. 27.
It has advanced almost 10% from this year’s low of 1,285.7 scraped on Mar. 19.
On Friday, foreign investors bought a net 142.6 billion won worth of shares on the Seoul stock markets, bringing their cumulative net purchases to 817.0 billion won since Sept. 10, during which time the benchmark stock index has inched 0.7% higher.
On Friday, the Kospi closed up 0.26% to 2,412.40.
The Chinese yuan climbed to its highest level since May 2019, buoyed by strong August retail sales and industrial output data released earlier this week.
The dollar/won exchange rate will likely decline to the 1,140-1,150 range until the Nov. 3 presidential election, said Hana Financial Investment analyst Nah Joong-hyuk.
"If a coronavirus vaccine is developed and the pandemic wanes, the dollar/won rate will drop further to the 1,100 won level," he added.
Write to Ik-Hwan Kim at lovepen@hankyung.com
The local currency is expected to continue its upward run through the Nov. 3 US presidential election, with the Federal Reserve’s commitment to ultra-low interest rates likely to boost investors’ risk appetite, analysts said.
The won closed at 1,160.3 per dollar, just off the intraday high of 1,160.2, versus Thursday’s finish at 1,174.4.
It marked the strongest finish since the 1,159.1 touched on Jan. 20 before the coronavirus broke out, and the biggest daily gain since Mar. 27.
It has advanced almost 10% from this year’s low of 1,285.7 scraped on Mar. 19.
On Friday, foreign investors bought a net 142.6 billion won worth of shares on the Seoul stock markets, bringing their cumulative net purchases to 817.0 billion won since Sept. 10, during which time the benchmark stock index has inched 0.7% higher.
On Friday, the Kospi closed up 0.26% to 2,412.40.
The Chinese yuan climbed to its highest level since May 2019, buoyed by strong August retail sales and industrial output data released earlier this week.
The dollar/won exchange rate will likely decline to the 1,140-1,150 range until the Nov. 3 presidential election, said Hana Financial Investment analyst Nah Joong-hyuk.
"If a coronavirus vaccine is developed and the pandemic wanes, the dollar/won rate will drop further to the 1,100 won level," he added.
Write to Ik-Hwan Kim at lovepen@hankyung.com
Yeonhee Kim edited this article
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