Korean Won Weakens for Second Day as Global Funds Sell Shares

By Kim Kyoungwha

Dec. 23 (Bloomberg) -- South Korea’s won weakened for a second day as concern about a global recession prompted overseas investors to turn net sellers of local shares for the first time in five days.

Losses in the currency, Asia’s worst performer this year, may be limited on speculation the authorities will support the won to help prevent year-end foreign exchange moves undermining balance sheets for companies and banks, according to Park Hae Il, an options trader with Shinhan Bank in Seoul. The Kospi index fell, extending this year’s loss to 38 percent.

“As seen in the past months, the currency market is taking an early cue from stock movements,” Park said. “Nonetheless, the government’s intention to moderate the won’s loss ahead of year-end will be reflected in the market.”

The won fell 0.3 percent to 1,313.75 per dollar as of 9:19 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The currency is down 29 percent this year, the worst performance among the 10 most-traded regional currencies outside Japan.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.