The Won has slid to an eight-week low due to a heightened risk of conflict on the Korean peninsula. Investors are growing increasingly nervous and have spurred on the outflow of foreign funds out of the South.
Tensions have escalated in recent days after the North warned embassies to evacuate their staff as it won’t be able to guarantee their safety on April 10th. The South Koreans have warned that the Communist North could launch a missile by the end of the week.
“Tensions with North Korea are intensifying, making investors nervous about the situation on the Korean peninsula and prompting sales of South Korean assets,” said Jeon Seung Ji, analyst at Samsung Futures Inc. in Seoul. “Authorities may try to take action if they find market reactions are excessive, while investors will also eye the yen-won movement.”
The North’s increasingly erratic and aggressive rhetoric escalated after the USA and United Nations imposed fresh sanctions against the rogue nation as it continued to carry out nuclear bomb tests despite condemnation from the international community.
The Won has weakened by 1.8% since the North passed a law authorizing ‘counter-actions’ against US aggression, measures that included a nuclear strike.
China, the North’s only remaining ally seems to losing patience with its troublesome friend as Chinese President Xi Jinping warned that no country should be allowed to instigate regional chaos. April 10th appears to be the day when the world finds out if North Korea will actually follow through with its threats, as the day approaches we can expect to see the Won weaken further as investors take their funds out of the country as a precautionary measure.
Current South Korean Won exchange rates
As of 09.40am
The Pound Sterling to Korean Won exchange rate is currently trading in the region of 1747.7710
The Euro to Korean Won exchange rate is currently trading in the region of 1484.5585
The US Dollar to Korean Won exchange rate is currently trading in the region of 1141.2575
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