Won Rebounds on U.S. Rate Hike Slowdown

  • By Shon Jin-seok

    December 02, 2022 10:27

    The dollar fell on Thursday after U.S. Federal Reserve Chairman Jerome Powell said he could slow down the pace of interest rate hikes this month. That strengthened the Korean won to the 1,200 level against the greenback for the first time in four months. 
    The won rose W19.1 to W1,299.70. Foreign investors snapped up Korean stocks, sending the benchmark Korea Composite Stock Price Index up 0.3 percent to 2,479.84 points and the junior Kosdaq 1.52 percent to 740.60 points. 
    An electronic board shows the Korean won closing at 1,299.70 against the U.S. dollar at KEB Hana Bank headquarters in Seoul on Thursday. /Newsis
    Powell said in a speech at the Brookings Institution on Wednesday, “It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.” 
    The Fed hiked the policy rate by 0.75 percentage points in June, July, September and November.
    The comments triggered a concerted sigh of relief in global financial markets. But global inflation remains high, while the Fed's decision reflects a dawning sense that the unprecedented increases so far could result in a global recession. 
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