South Korea Won Falls to 3 Year Low
kpopluv, July 24, 2015, 9:32 a.m.
The won closed at W1,165.1 against the U.S. dollar on Thursday, down W11.5 from the previous day and a three-year low (US$W1,163). Forex market sentiment went in favour of the greenback amid strong U.S. housing market data announced Wednesday, which raised prospects of a Fed rate hike in September.
U.S. housing sales in June totaled 5.94 million units, the highest since February of 2007 and beating expectations of 5.4 million. Shin Seong-in at Shinhan Investment said, "The global dollar rally is the main reason for the won's weakness, but foreigners pulling capital out of Korea also play a significant role."
Foreigners sold W377 billion worth of stocks on the Korea Composite Stock Price Index on Wednesday and almost W190 billion on Thursday. To buy stocks here, foreigners sell dollars and buy won, so they end up losing money if the Korean currency weakens.