Korean Won Falling Aggressively As Global Funds Escape

South Korea’s won is leading a drop in Asian currencies this year, after gaining the most in the second half of 2013, as tapering of U.S. stimulus drains funds from emerging-market assets and China’s economy slows.

The won has weakened 2.3 percent since Dec. 31 to 1,074.45 per dollar on Feb. 7, according to data compiled by Bloomberg. An 8.8 percent jump in the July-December period was more than six times the gain of any other regional currency. Scotiabank, which had the closest won estimates for the last four quarters in data compiled by Bloomberg Rankings, recommended in a Feb. 5 report that investors bet on further losses this quarter.

Global funds withdrew a net $2.3 billion from South Korean stocks this year, almost the combined outflows from India, Taiwan and Thailand, exchange data show. Hyundai Motor Co. and Kia Motors Corp., the nation’s biggest carmakers, may welcome a weaker won after 2013’s currency gains eroded sales and profits, while a slide in the yen benefited Japanese counterparts.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu