Korean won weakens against U.S. dollar amid concerns about global currency war

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The Korean won strengthened against U.S. dollar on Thursday amid concerns the Trump administration could lead the world into a new wave of currency wars.
A stronger local currency could hurt the Korean economy, which is heavily reliant on exports.
Kim Hyesung has more.

U.S. President Donald Trump's accusation that China and Japan are manipulating their currencies has sent shockwaves around the world, and Korea is feeling it too.
His comments, signaling a preference for a weaker dollar, saw the Korean won strengthen against the greenback on Thursday, closing below the 1-thousand-1-hundred-50-won mark for the first time in three months.
That's in sharp contrast to the latter part of last year when the Korean won weakened between September and December... due to the U.S. rate hike and Trump's campaign promises to boost government spending.
The weaker won gave Korean exports a competitive edge, making them relatively cheaper on the global market.
And in fact, according to the Ministry of Trade, Industry and Energy, Korea's exports increased for three straight months, a welcome turnaround, recording over 40 billion dollars in January... for an on-year increase of 11-point-2 percent.
But this trend could be short-lived.


"The Korean won has strengthened against the dollar since early Janauary, and it's gaining pace. A stronger won is likely to hurt Korean exports, which have been rising since November. But in the long run, the dollar is likely to keep getting stronger with the Fed expected to raise interest rates and the U.S. economic recovery to gain traction on tax cuts and deregulation."

But with the Trump administration continuing to push for protectionism... and the renegotiation of existing trade deals,... many Korean exporters are worried that a currency war or trade war could be around the corner.
Kim Hyesung, Arirang News.

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