South Korean Won Firms As Authorities Pledge Action

The South Korean won gained to around 1,550 per dollar, rebounding slightly after touching its weakest level since March 2009 near 1,560, as authorities moved to contain speculative FX activity and market volatility. Top policymakers from the Finance Ministry, Bank of Korea, Financial Services Commission, and Financial Supervisory Service vowed to closely monitor the market and investigate suspected disruptive trading activity. However, gains remained limited by broad dollar strength after unexpectedly strong US labor market data prompted investors to scale back expectations for Federal Reserve easing. Continued foreign selling of Korean equities also fueled demand for dollars. Additional headwinds came from renewed Middle East tensions after reports that Iran fired missiles at Israel, boosting safe-haven demand for the greenback and raising concerns over higher energy costs for South Korea.

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