Won likely to drop further in 2015: report

The South Korean currency will continue to slide next year and fall to 1,140 won against the U.S. dollar amid the Japanese yen weakening from its stimulus package, a report said Friday.

“We are rolling forward our U.S. dollar-Korean won forecasts to 1,100 won, 1,130 won, 1,140 won for 3-, 6- and 12-month horizons, from 1,060 won, 1,080 won and 1,100 won previously,” said the Goldman Sachs report. “We retain our long-term forecasts for end-2016 and end-2017 at 1,200 won.”

It said that the depreciation of the Korean won is fueled by the recent stimulus monetary policy in Japan, which has led to further upside for the Japanese yen against the U.S. dollar.

“The trigger for our revision this time is the announcement of the Bank of Japan on Oct. 31 to expand the existing easing program, quantitative and qualitative easing,” said the U.S.-based investment bank.

It estimated that the Japanese currency will fall to 120 yen against the U.S. greenback by the end of next year.

In the South Korean market, the won has been on a decline for seven straight sessions, hitting a nine-month low Thursday.

The local currency was trading at 1,092 won to the U.S. dollar as of 11:45 a.m. on Friday, down 8.2 won from the previous close, marking the lowest since Sept. 6, 2013, when the comparable figure was 1,093.00 won. (Yonhap)