After 3 days of sequential losses, the South Korean won had its first session of gains as the American Treasury Secretary Timothy Geithner affirmed that most banks in the U.S. have «enough capital», causing a rally in assets from emerging countries.
This week didnt necessarily start as a satisfactory one for KRW traders, with China failing to recover its GDP growth and after the Bank of America having to inject more money on bad loans, the won had 3 days of consecutive losses in the international currency market. After Geithners declaration that the majority of banks in the United States are in a financially healthy condition, the won improved, and according to the South Korean government, the domestic economy is showing positive and negative numbers, making the national stock market to be in a rather stable position.
Asian analysts agreed that the bulling movement in the American stock market is helping currencies in emergent-markets to gain against major pairs, but the instability during the past days caused substantial losses for the South Korean Won, reversing a winning trend that has started in March. Being an exporting country, the Korean economy is expected to contract 4% this year, as a consequence of a slumping global demand for its products; the unemployment rate has reached the same level it had during the late 90s Asian market crisis.
The USD/KRW traded as 1,347.8 from 1,342.4 in the intraday. Since March, the USD/KRW slid significantly, falling from 1.550,0 to the current level.
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