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S. Korea's currency tumbles amid global tightening, rising geopolitical risks

Economy 10:17 October 11, 2022

SEOUL, Oct. 11 (Yonhap) -- The South Korean currency dived through the 1,430 mark in intraday trading on Tuesday amid growing worries over aggressive monetary tightening in the United States and rising geopolitical risks linked to the ongoing war in Ukraine.

The local currency was trading at 1,428.4 won against the U.S. dollar as of 9:54 a.m., down 16 won from the previous session's close. The won fell to as low as 1,433.4 at one point.

The slide came after the U.S. announced better-than-expected unemployment data that has led to the belief that the Federal Reserve will have more room for large rate hikes going forward.

Rising geopolitical risks related to the ongoing war between Russia and Ukraine have also added to economic uncertainty and intensified risk aversion among investors.

Media reports showed that Russia recently launched a barrage of missile attacks in Ukrainian cities in an apparent retaliation of an attack that damaged a strategically important bridge connecting Russia with the Crimean Peninsula.

The local currency has been one of the worst performers amid the dollar's continued ascent. The won has depreciated about 16 percent so far this year.

The won appears to be under additional downward pressure as Seoul stocks tumbled amid massive foreign selling on Tuesday.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 53.29 points, or 2.39 percent, to 2,179.55 as of 9:41 a.m. Foreign investors have unloaded around 100 billion won worth of local stocks in net value.


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