Soaring Dollar

 

The U.S. dollar surged 11.5 won or 0.99 percent on July 23 from the previous trading session to close at 1,165.1 won, marking the highest price in 37 months since it traded at 1,165.6 won on June 15, 2012.

The greenback posted its strongest position on the day against the Korean won in more than three years, with its value gaining more than 8 percent over the past three months.

Analysts said that the strong dollar is attributable to the expected rate hike of the Federal Reserve later this year and the record-low basic rate in Korea.

Several investment banks and currency dealers have already predicted that the dollar would rise above 1,200 won in the coming weeks or months. Goldman Sachs forecast that the dollar would rise to even 1,300 won within 12 months, citing Korea’s weakening industrial output and exports as the reasons for the further won weakness.

On the day, foreigners sold stocks worth 189.1 billion won (US$162.0 million) on Korea’s main bourse.

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