Seoul stocks shrug off Fed hike, but won weakens sharply
Seoul stocks held largely steady Thursday after the U.S. Federal Reserve raised its benchmark interest rate for the first time in more than three years, as the move was largely anticipated and already priced into the market. The Korean won, however, weakened sharply against the dollar as the widening Korea-U.S. interest rate gap and the prospect of further Fed tightening boosted demand for…
Seoul stocks largely remained stable on Thursday despite the U.S. Federal Reserve's first interest rate hike in over three years, as market participants had already factored in the move. The Korean won, however, saw a significant weakening against the dollar due to the widening gap between Korea and U.S. interest rates and the expectation of more Fed tightening.
The Federal Reserve increased its key rate by 0.25 percentage points to a range of 3.75 percent to 4 percent. The Seoul foreign exchange market saw the local currency lose 13.6 won, closing at 1,382.2 won per dollar, marking its return to the 1,380 won level after three weeks. Analyst Moon Da-woon from Korea Investment & Securities explained, "The Fed's rate hike, combined with persistently high oil prices, is adding to upward pressure on the dollar.
Upward pressure on the won-dollar exchange rate is likely to persist until the U.S. midterm elections in early November." The KOSPI benchmark index opened 0.91 percent higher at 6,779.02 and stayed moderately positive.
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- Seoul stocks shrug off Fed hike, but won weakens sharply koreatimes.co.kr
