South Korean currency on volatile ride

By Park Sae-jin Posted : February 29, 2016, 16:44 Updated : February 29, 2016, 16:44
The South Korean won edged higher against the dollar Monday after hitting fresh multi-year intraday lows as jittery investors reacted to external uncertainties.

The won was quoted at 1,236.7 to the dollar at the conclusion of onshore trade, up 0.1 percent compared to Friday's close of 1,238.2.

Earlier. the local currency was traded at 1245.30, the lowest intra-day level since June 2010, before erasing all losses on exporters’ sale of of dollars for a end-month trade settlement.

The won was under pressure from a strong US dollar and the continued depreciation of yuan that sent Chinese stocks tumble on Monday.

US consumer spending rose solidly in January and underlying inflation picked up by the most in four years, easing fears of a looming recession in the United States and keeping Federal Reserve interest rate hikes on the table this year. The US central bank raised rates in December for the first time in nearly a decade.

China's central bank on Monday fixed its central rate for the yuan currency at a four-week low, data showed, despite comments by chief Zhou Xiaochuan that there was no basis for further depreciation.

The People's Bank of China (PBoC) set the yuan at 6.5452 to $1.0, down 0.17 percent from Friday, the weakest since February 3.

Last Friday, Zhou told a forum of investors on the sidelines of the G20 finance ministers' meeting in Shanghai that "there is no basis for persistent [yuan] depreciation from the perspective of economic fundamentals".

In a communique last week, G20 countries pledged to avoid "competitive devaluations" without mentioning China.

BY Alex Lee
 
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