South Korean Won Rises On Its Strongest Rate Since July Amid Possibility Of A Delay In Interest Rate Hike By The U.S. Federal Reserve
On Monday, the South Korean won surged against the dollar after struggling to catch up with other currencies over the weekend, following expectations of a delayed interest rate hike by the U.S. Federal Reserve until next year, reported The Economic Times on Monday.
The Korean won reportedly closed local trade with a 1.4 percent increase at 1,143.5 per dollar. The figure was the currency's strongest intraday rate since July 15 of this year.
According to The Guardian on Oct. 8, the Federal Reserve was almost set on raising interest rates this September, but decided to delay it due to China's sluggish economic growth that could potentially harm the growth and inflation of the U.S.
Some people and a few members of the Federal Reserve were concerned that an early interest rate hike could negatively affect the credibility of the central bank.
The Business Standard noted on Monday that Federal Reserve Vice Chairman Stanley Fischer was quoted saying the interest rate hike this year is "an expectation, not a commitment."
Fischer's comment boosted South Korean won and weakened the U.S. dollar as the market expected a delay in the rate hike if the economy of U.S. slows down at the end of the year. South Korean stocks also closed at a higher rate for the fifth consecutive session, thinking that the delay in interest rate hike may be beneficial to the country's economy as well as relentless foreign buying.
For a fourth session, foreigners emerged as the net buyers, purchasing a net total of $107.44 million of shares in the main stock exchange.
The Korea Composite Stock Price Index also increased by 2.1 points at 2,021.63. The trading volume reflected 624.4 million shares at $5.24 billion.
However, export sales from investors weakened due to fears of the Korean currency reducing their overseas earnings after bringing products to their country.
