The U.S. dollar’s globally strong positon is pulling down the Korean won’s value, with the won-dollar exchange rate reaching its highest point since July 8, 2013.
The dollar rose 4.6 won from the previous trading session to close at 1,152.1 won on Monday.
The exchange rate ― amid growing expectations of a rate hike in the U.S. later this year ― is likely to surpass 1,161.4 won reached on June 24, 2013, in the coming weeks, some local currency dealers predicted.
If it breaks through the barrier, the greenback will be at its strongest level in more than three years after it traded at 1,161.7 won on June 25, 2012, under the previous administration.
Daishin Securities analyst Park Hyung-joong predicted that the rate will rise to 1,170 won in the third quarter and 1,200 won in the next. He cited “widening uncertainty over the coming U.S. rate hike” and a “possible dollar outflow in the wake of the Korean government’s policy to promote overseas investments” as the main factors weakening the won’s value.
Goldman Sachs earlier this month forecast that the dollar would rise to 1,300 won within 12 months. The investment bank highlighted Korea’s industrial output and export slump as the reasons for the won’s possible weakness.
By Kim Yon-se (
kys@heraldcorp.com)
