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(2nd LD) Won-dollar volatility surges in January on Trump's policy

All News 19:19 February 09, 2017

(ATTN: RECASTS first three paras for clarification)

SEOUL, Feb. 9 (Yonhap) -- Volatility in dollar-won exchange rates rose sharply last month amid uncertainty over the Donald Trump administration's policy direction, while the Korean currency gained ground against the greenback, central bank data showed Thursday.

The average range of fluctuation in the value of the won per dollar widened to 7.7 won a day during the month, up 1.7 won from December, according to the Bank of Korea (BOK).

The daily variation of the dollar-won rate averaged 0.60 percent in January, higher than 0.34 percent a month earlier and 0.47 percent in November.

The figure shows how much the rate changes compared with the previous day's closing price.

U.S. President Donald Trump (AP-Yonhap file photo)

The won finished January trade at 1,162.1 against the U.S. dollar, versus 1,207.7 a month earlier. It closed at 1,147.20 won on Wednesday.

"In January, the won-dollar exchange rate declined at a considerable level as an impact of the Trump administration's comments against a strong dollar and policy move to strengthen protectionism," the BOK said in a monthly report on international finance.

Foreign investors poured a net US$2.6 billion of funds into the local capital market -- $1.26 billion in stocks and $1.34 billion in bonds -- in January.

It marks a sharp rise from $790 million in net inflows a month earlier.

The credit default swaps (CDS) premium for foreign exchange stabilization bonds remained relatively low, although it climbed to 47 basis points from 45 basis points in December, said the BOK.

This file photo shows a Seoul bank's foreign exchange dealing room. (Yonhap)


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