The South Korean won on Tuesday slipped from its top value in about six months against the world's reserve currency after producer prices prompted concerns about the near term for the country's economy, Bloomberg reports.
In August, the Producer Price Index fell 1.3 percent as compared to August 2012. The metric fell 1 percent in July. As the U.S. Federal Reserve convenes two days of meetings beginning Tuesday, the won is likely to be impacted, Reuters reports.
"Should the (tapering) be more dovish than expected … the dollar will receive firm support against major currencies as it would signal the beginning of a long exit," states a Tuesday investor note penned by foreign exchange analyst Chung Kyung-parl with KEB Futures in Seoul, according to Reuters. "However, if the results are hawkish, investors will want to take profits from their risk-asset investments very quickly."
The South Korean won dove 0.3 percent against the greenback after touching its top value since February against the monetary unit on Monday.
Reuters reports South Korean markets will be closed from Wednesday through the rest of the week for a national holiday, so when the won will be impacted by the Fed meetings is unclear.
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