ID :
27784
Fri, 10/31/2008 - 18:22
Auther :
Shortlink :
https://www.oananews.org//node/27784
The shortlink copeid
S. Korean currency dips 3.2 pct to U.S. dollar
SEOUL, Oct. 31 (Yonhap) -- South Korea's currency declined 3.2 percent against the U.S. dollar Friday following the previous session's surge triggered by a currency swap deal with the U.S., dealers said.
The local currency closed at 1,291 won to the greenback, down 41 won from
Thursday's close, after dipping to an intra-day low of 1,299 won at one point.
The won declined for the first time in three sessions, with its value having
dipped about 27 percent to the dollar so far this year.
"Factors like stock rallies and foreign buying of local shares put upward
pressure on the local currency. But the won's weakness came today because of
bargain hunting following the previous session's sharp gains," said Jeon
Seung-ji, a currency analyst at Samsung Futures Inc.
"It is certain that the currency swap deal largely contributes to dispelling
fears over a possible national bankruptcy, but the won is likely to be under
downward pressure to the dollar over the long haul as global financial turmoil
begins to affect the real economy."
The U.S. Federal Reserve announced Wednesday that it will sign a currency swap
arrangement of up to US$30 billion each with the central banks of South Korea,
Mexico, Brazil and Singapore, to help improve liquidity conditions in the global
financial markets.
On the back of the news, the Korean currency posted the largest daily gain to the
dollar in 11 years on Thursday, helped by the swap deal, a bullish stock market
and Seoul's decreased current account deficit. The country's key stock index
soared almost 12 percent on the same day.
On Friday, South Korea's benchmark Korea Composite Stock Price Index (KOSPI)
jumped 2.61 percent to 1,113.06. Foreign investors snapped up a net 323.2 billion
won ($250.3 million) worth of local stocks on the Seoul bourse.
"Next week, the local currency may gain more momentum due to favorable external
factors. Possible rate cuts in the European Union and England and outcomes of the
U.S. presidential election could work to ease uncertainty in the market," Jeon
said adding that the local currency may trade between 1,200-1,350 won-range to
the dollar next week.
The local currency closed at 1,291 won to the greenback, down 41 won from
Thursday's close, after dipping to an intra-day low of 1,299 won at one point.
The won declined for the first time in three sessions, with its value having
dipped about 27 percent to the dollar so far this year.
"Factors like stock rallies and foreign buying of local shares put upward
pressure on the local currency. But the won's weakness came today because of
bargain hunting following the previous session's sharp gains," said Jeon
Seung-ji, a currency analyst at Samsung Futures Inc.
"It is certain that the currency swap deal largely contributes to dispelling
fears over a possible national bankruptcy, but the won is likely to be under
downward pressure to the dollar over the long haul as global financial turmoil
begins to affect the real economy."
The U.S. Federal Reserve announced Wednesday that it will sign a currency swap
arrangement of up to US$30 billion each with the central banks of South Korea,
Mexico, Brazil and Singapore, to help improve liquidity conditions in the global
financial markets.
On the back of the news, the Korean currency posted the largest daily gain to the
dollar in 11 years on Thursday, helped by the swap deal, a bullish stock market
and Seoul's decreased current account deficit. The country's key stock index
soared almost 12 percent on the same day.
On Friday, South Korea's benchmark Korea Composite Stock Price Index (KOSPI)
jumped 2.61 percent to 1,113.06. Foreign investors snapped up a net 323.2 billion
won ($250.3 million) worth of local stocks on the Seoul bourse.
"Next week, the local currency may gain more momentum due to favorable external
factors. Possible rate cuts in the European Union and England and outcomes of the
U.S. presidential election could work to ease uncertainty in the market," Jeon
said adding that the local currency may trade between 1,200-1,350 won-range to
the dollar next week.
