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The Korean won is continuing to weaken against the U.S. dollar and the Japanese yen. The won on Monday rose W7.8 to close at W965.3 per dollar on the Seoul foreign exchange market, its weakest level in 19 months.
A Citibank manager said a growing number of foreign investors, nervous about Korea's persistent current account deficit, are dumping Korean stocks and converting the proceeds into U.S. dollars, which is pushing up the won/dollar exchange rate.
The dollar will likely remain strong for the time being, as many foreigners will receive stock dividend payments during the annual meeting season of stockholders in March and April.
The Citibank manager predicted the greenback will continue to strengthen against the won at least until late March, possibly rising to the W980 range.
As of 3 p.m. Monday on the Seoul foreign exchange market, the won was trading at W945.9 per 100 yen, the Korean currency's weakest level against the yen since May 11, 2005.
The yen/won exchange rate soared as the yen/dollar exchange rate dropped to 102.1 yen per dollar (as of 3 p.m. Monday on the Tokyo foreign exchange market) and the won/dollar exchange rate rose.
Lee Sung-hee, head of JP Morgan Chase (Seoul Branch), said, "It seems likely that the yen will continue to strengthen against the U.S. dollar, as investors sell low-interest yen-denominated dollar bonds amid the U.S. financial crunch."
(englishnews@chosun.com )
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