Korean Won Declines To 17-year Low Against U.S. Dollar
(RTTNews) - The Korean won declined against the U.S. dollar in the European session on Tuesday.
Concern over the collapse of the Korean won is intensifying, according to remarks made by the Bank of Korea (BoK).
According to a BoK official, the bank is "closely watching the foreign exchange market situation" and cautioned that if there are indications of "clear herd-like behavior" in the market, authorities may take action.
The source also underlined that despite the Korean Won's recent decline being "much faster than other currencies," the central bank is not aiming for a particular exchange rate level.
The central bank claims that comments made earlier by the nominee for the next governor of the Bank of Korea caused the currency's steep decline.
In terms of monetary policy, Federal Reserve (Fed) Chair Jerome Powell stated on Monday that inflation pressures are now under control, dampening expectations of an impending interest rate hike. His remarks restricted the US dollar's upward momentum and drove down US Treasury yields.
Against the U.S. dollar, the Korean won fell to a to a 17-year low of 1536.72 from an early high of 1518.55.
If the Korean won extends its downtrend, it is likely to find its resistance around the 1.16 region.
Looking ahead, Canada GDP for January, U.S. Redbook report, U.S. S&P/Case-Shiller home price for January, U.S. Consumer Board's consumer confidence for March, U.S. Chicago PMI data for March and U.S. Dallas Fed services index for March are slated for release in the New York session.
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