The South Korean won declined for a third consecutive session to drop to more than a one-week low early on Friday as deepening uncertainty about Donald Trump’s presidency fuelled risk-aversion among investors in emerging markets like South Korea. U.S. President Trump flatly denied he asked the Federal Bureau f Investigation to end a probe into possible collusion between his campaign team and Russia, but talk over the possibility that he could be impeached has made some investors in emerging markets look for safer havens.
A sharp acceleration in U.S. factory activity gave the dollar a lift on international exchanges, putting extra pressure on the won. The won was quoted at 1,128.3 against the dollar as of 0235 GMT, down 0.3 percent compared with Thursday’s close of 1,124.5. It had touched as low as 1,131.1 as soon as the market opened.
“It is true that the greenback itself strengthened in the global market, but the won seems to be losing more than expected due to strong risk-off mood in Asia region,” said Ha Keon-hyeong, a foreign exchange analyst at Shinhan Investment Corp. He expected dollar strength to continue in coming week, but saw won trading in a narrow range as end-month dollar-selling from local exporters will support the South Korean currency.
South Korean shares were almost unchanged with The Korea Composite Stock Price Index (KOSPI) at 2,286.70 points. Offshore investors had purchasedg 63.2 billion Korean won ($56.09 million) worth of KOSPI shares near mid-session. Hyundai Motor Co denied a media report that it is seeking to introduce a holding company structure, though investors still harboured expectations. The company shares rose over 3 percent. Market heavyweight Samsung Electronics dropped 2.4 percent. June futures on three-year treasury bonds gained 0.06 point to 109.50.