SEOUL: South Korea’s currency fell to the lowest level against the U.S. dollar in two months on Wednesday, moving in tandem with major counterparts’ descent against the greenback on rising speculation that the U.S. Federal Reserve will hike borrowing costs, analysts said.
The Korean won was changing hands at 1,107.30 per dollar as of 1:37 p.m., down 6.3 won from the previous session’s close.
The local currency’s drop came as the U.S. dollar has spiked on data showing that the world’s largest economy is on a firm recovery track, which in turn is prodding the U.S. Fed to start its much-awaited rate hike in the second half of the year.
The local currency’s drop versus the dollar also came as the Japanese yen dropped to an eight-year low, forcing South Korea’s currency authorities to step in to curb the won’s sharp rise against the yen, they said.
South Korean exporters and their Japanese rivals compete in overseas markets over products ranging from autos and ships to electronic goods, which means that a weak Japanese currency poses a threat to South Korean firms.
