[Seoul Foreign Exchange Market]Dollar-Won Gains Narrow as Dollar-Yen Extends Losses—Up 3.40 Won

(Seoul=Yonhap Infomax) Ji Yeon Kim – The dollar-won exchange rate briefly fell below the 1,470-won mark on Thursday, tracking a downward move in the dollar-yen rate.

As of 13:36 KST on November 21, the dollar-won was trading at 1,471.30 won, up 3.40 won from the previous session.

The pair opened at 1,472.40 won, up 4.50 won, amid heightened risk-off sentiment. It touched an intraday high of 1,473.90 won shortly after the open, but gains were pared as exporters sold dollars at the upper end of the range.

Subsequently, the dollar-won tested both ends of its range, before turning lower as the dollar-yen rate extended its decline during the session.

The Japanese government announced a fiscal stimulus package totaling 21.3 trillion yen, prompting the dollar-yen to drop to as low as 157.1 yen. This move is seen as partially unwinding yen short positions that had built up in anticipation of large-scale fiscal stimulus.

In tandem, the dollar-won slipped to an intraday low of 1,469.10 won in afternoon trading, before finding support at the lower end of the range.

South Korea's benchmark KOSPI index plunged nearly 4% intraday, while foreign investors net sold over 2 trillion won ($1.54 billion) worth of stocks on the main board, helping to support the dollar-won's downside.

"Risk-off sentiment is strong today, but the global dollar is showing stable weakness in the Asian session," said a foreign exchange dealer at a local securities firm. "The dollar-won appears to have edged down in line with this trend."

Later tonight, speeches are scheduled from John Williams, President of the Federal Reserve Bank of New York; Michael Barr, Federal Reserve Board Governor; Philip Jefferson, Vice Chair of the Federal Reserve; and Lorie Logan, President of the Federal Reserve Bank of Dallas.

Key U.S. economic indicators to be released include the November S&P Global Manufacturing and Services Purchasing Managers' Index (PMI), as well as the University of Michigan's Consumer Sentiment Index and inflation expectations for November.

In the currency futures market, foreign investors were net sellers of more than 16,000 dollar contracts.

The dollar index fell to 100.12.

The KOSPI closed down 4.03%, with foreign investors net selling 2.3099 trillion won ($1.78 billion) worth of stocks on the main board.

At the same time, the dollar-yen was trading at 157.178 yen, down 0.384 yen from the New York session, while the euro-dollar was at 1.1537, up 0.0012.

The yen-won cross rate stood at 936.34 won per 100 yen, and the yuan-won rate was at 206.79 won.

The offshore dollar-yuan (CNH) rate fell to 7.1142 yuan.

jykim2@yna.co.kr

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