The South Korean won gained a fresh momentum of strengthening after hopes were raised for softening in the trade war between the United States and China upon news that the two state leaders will be holding talks on the sides of G20 meeting in Osaka next week.
The Korean currency opened Wednesday at 1,176.0 against the U.S. dollar, sharply up 9.8 from the previous session and closed at 1,175.780 against the dollar, up 10.10 won or 0.85 percent.
The won steeply picked up after the U.S. President Donald Trump said he and his Chinese counterpart Xi Jinping agreed to have an extended meeting next week at the G20 in Japan through a telephone conversation. The dollar declined across the globe amid expectations for a breakthrough in the trade tensions in the upcoming summit meeting.
Expectations on eased geopolitical risks on the Korean peninsula also pushed up the Korean won as Chinese President Xi will make his first state visit to North Korea on Thursday. “We will actively contribute to peace, stability, development and prosperity in the region by strengthening communication and coordination with the Democratic People’s Republic of Korea,” said Xi in an op-ed in North Korean state newspaper Rodong Sinmun on Wednesday.
Market analysts said the won is expected to stay boxed around 1,175 to wait for the comments for future direction in the dollar as the result of the comments from the U.S. Federal Reserve’s policy setting meeting that kicked off Tuesday (local time). The Fed is expected to maintain the policy rate unchanged this time, but accommodative stance has been strengthened globally after the dovish comments from the European Central Bank President Mario Draghi.
The main Kospi finished 1.24 percent higher from the previous session at 2,124.78.
By Jung Joo-won and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]