SEOUL: The South Korean won ranks among the global currencies that have strengthened the most against the U.S. dollar this year, data showed Thursday, due partly to a weakening Japanese yen as well as increasing stock investments by foreigners.
The local currency has gained 2.8 percent against the U.S. dollar since the end of last year, according to central bank data. It ended at 1,068.6 won versus the greenback on Wednesday, appreciating from 1,099.3 won on Dec. 30, 2014.
The gain is the third-largest among 32 major global currencies, only lagging behind Taiwan’s dollar at 3.9 percent and the Swiss franc at 3.5 percent.
Most currencies weakened against the U.S. dollar as the greenback rose ahead of an expected rate hike by the U.S. Federal Reserve.
The Turkish lira slumped 12.2 percent, while the Danish krone tumbled 10 percent. The euro weakened 9.8 percent on the European Central Bank’s quantitative easing while Brazil’s real depreciated 9.6 percent.
Economists said Tokyo’s aggressive quantitative easing played a key role in boosting the won this year.
“The won’s gain was much bigger than other currencies after South Korea was named as one of the countries that would see the biggest loss from Japan’s additional quantitative easing,” said Seo Jung-hoon, a researcher at Korea Exchange Bank.
South Korea’s massive current account surplus, which is expected to near US$100 billion this year, as well growing net buying by foreign investors have also been pushing the won higher.
