Korean Won Sinks to 6Month Low vs. Dollar

10/1/2014 6:34:58 AM

(MENAFN- Qatar News Agency) Seoul October 01 (QNA) - The South Korean won dropped to its lowest level against the US dollar in six months Wednesday extending its loss to the fifth consecutive session as the greenback built up further gains against major peers amid concerns over a slowdown in the eurozone economy and hopes for a further monetary easing in Asia's fourth-largest economy.

The local currency was changing hands at 1063.15 won against the greenback sharply down 7.95 won from the previous session's close according to South Korea's (Yonhap) News Agency.

The figure marks the lowest since the closing price of 1064.70 won on March 31.

The US dollar exceeded the 110-yen mark for the first time in more than six years in Tokyo earlier in the day on growing expectations over diverging monetary policy directions in the world's two major economies.

The local currency has been losing ground against the dollar on a possibility that the US Federal Reserve will accelerate its rate hike.

The US economy the world's largest grew at an annual rate of 4.6% in the second quarter the fastest pace since 2011 further raising hopes that its currency would strengthen against its peers.

In contrast market players' hopes for another rate cut by the Bank of Korea ran high after South Korean inflation grew at its slowest rate for seven months in September on the back of stable prices of food and as the recovery pace in Asia's fourth-largest economy is showing signs of a let-up.

The central bank cut its base rate by a quarter percentage point to 2.25% in August and is expected to make another rate reduction in either October or November to help boost the economy's still weak recovery pace.

Also the European Central Bank is widely forecast to make a further easing this month providing a further boost to the already strong dollar analysts said. (QNA)

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