The South Korean won has limited room to strengthen further in the short term, according to State Street Markets, as exporter dollar-selling flows have weakened and domestic demand for overseas stocks remains strong. After falling to the 1,560 won-per-dollar range in early June, its weakest level since the 2009 global financial crisis, the won rebounded to the low 1,330s in September. However, State Street has shifted to an underweight position on the currency and expects it to weaken to around 1,390-1,400 per dollar by year-end. The bank cited fading dollar-won conversions linked to SK hynix’s American depositary receipt, the absorption of corporate tax-related dollar selling and weaker exporter flows as factors limiting further gains. Korean investors have also continued to buy US stocks, with net purchases of $4.64 billion in July, $1.96 billion in August and nearly $1 billion in September, adding pressure on the won. Foreign investors have also continued to sell Korean shares. Over the medium to long term, however, State Street remains positive on the won, citing Korea’s large current account surplus, expected corporate tax-related dollar selling next year and possible won conversions by Samsung Electronics and SK hynix to fund shareholder returns.     (ICE SEOUL)

Fonte notizia: THE KOREA HERALD