South Korean Won Up on Outlook for Rates Hike & Inflation

The South Korean won extended its rally for yet another day as the anticipation that the central bank would raise the interest rates increased the appeal of the currency.
The central bank increased the borrowing costs by the quarter percentage point on July 9 from the record low level of 2 percent. The forecasts promise the consumer prices in South Korea to rise by 2.8 percent in 2010, up from the previous estimates of 2.6 increase. The analysts say that the inflation pressure alone should push the won up even without the rates hike.
USD/KRW fell from 1,161.20 to 1,160.00 as of 9:18 GMT today.

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