 |
(Yonhap) |
Joe Biden's election as US president is likely to keep the South Korean currency strong against the US greenback for a while, which will work to trigger foreign capital inflow to the local stock markets, Yonhap quoted analysts as saying Sunday.
The local currency closed at 1,120.4 won against the US dollar Monday, up 7.8 won from the previous session's close and the strongest in 21 months.
Analysts said Biden's election victory could further push up the Korean won down the road, as the president-elect has supported large-scale fiscal spending and stimulus policies that would weaken the US dollar, the report said.
The strong won against the greenback would re-direct the FX-sensitive global passive funds to the local markets, analysts noted.
Foreign investors had dumped 577 billion won worth of local stocks in September and another 490 billion won last month.
In the first week of November, however, they raked in a net of 12 trillion won. On Thursday, they bought a net 1.13 trillion won, the largest daily sum since July 28.
Samsung Securities analyst Yoo Seung-min expected the strong Korean won to continue through next year, Yonhap reported.
"So far, the COVID-19 uncertainties and the Trump Administration's (economic) unilateralism and protectionism have kept the foreign cash within the US territory despite the weak dollar, but the US election results will help clear such obstacles one by one," he was quoted as saying.
The local stock market responded fast to the combination of a Joe Biden presidency and a Republican-dominated Senate.
Stocks related to green energy -- electric and hydrogen vehicles and bio -- lifted on the so-called Biden effect. (From news reports)
