Sell-off by foreigners erodes won
Korea’s won posted a weekly loss as overseas investors added to their sales of the nation’s stocks.The currency ended a two-week advance as the benchmark share index followed declines in U.S. equities yesterday after Federal Reserve Chairman Ben S. Bernanke said the “downside risks to growth have increased.”
The won is the second-worst performer of the 16 most-active currencies this year as funds abroad sold Korean stocks on every day except three in 2008.
“Foreign selling of stocks is heavily on the mind of traders,” said Kim Sung-soon, a currency dealer at the state-run Industrial Bank of Korea in Seoul. “Both onshore and offshore players are inclined to go long with dollars after the drop in U.S. shares.”
Korea’s currency fell 0.4 percent this week to 945.10 against the dollar as of the 3 p.m. close, local time, according to Seoul Money Brokerage Services. A long position is a bet an asset will gain. Overseas investors offloaded $10.4 billion more shares than they bought this year.
The Kospi index of shares lost 0.1 percent this week, its sixth decline in the seven weeks since the beginning of the year, adding to this year’s 11 percent loss.
Bloomberg
with the Korea JoongAng Daily
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