South Korea’s currency hit a 13-year low against the U.S. dollar after the Federal Reserve’s forecast of an interest rate hike fueled risk fears in Asia.
In early morning Asian trade, it rose as high as 1,410.05 in losses, its highest daily level since March 2009, according to FactSet. The dollar was last up 0.7% at KRW1,407.98, while the Kospi stock index was 180721.
It decreased by 1.0% at 2323.70. ICE US Dollar Index DXY;
It increased by 0.9% at 111.60.
“The Korean winner has historically tended to be the most sensitive Asian currency to both risk sentiment and the U.S. dollar,” Alvin T. Tan, head of Asia FX strategy at RBC Capital Markets, said in an email. It can cause more damage,” he said.
The win’s weakness came after Fed officials voted unanimously to raise the benchmark federal funds rate by 0.75 percentage points to a range between 3 percent and 3.25 percent, a level last seen in early 2008. According to new forecasts released on Wednesday, policy meetings in November and December show a sharp increase in inflation to between 4% and 4.5% by the end of the year.
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