The South Korean won marked its worst weekly losses in about four months against the world's reserve currency on Friday as confidence mounted that the U.S. Federal Reserve will continue reducing the amount of monetary stimulus measures in 2014, according to Bloomberg.
The Federal Open Market Committee on Wednesday opted to slash stimulus by $10 billion, and Bloomberg-polled economists said the Fed's policy-making arm is poised to follow suit during the body's next seven meetings. That harmed the won because asset purchases spur the inflow of dollars into emerging market economies.
"In the short term, this could result in increased volatility in financial and foreign currency markets," South Korean Finance Minister Hyun Oh-seok said during a policy maker meeting in Seoul, according to the Yonhap News Agency. "But the impact would be limited given our healthy economic fundamentals."
The won marked weekly drops of roughly 0.8 percent this week, notching the biggest loss since early August.
The government of South Korea said on Thursday that the reduction of stimulus by the U.S. means the globe's largest economy is leading the recovery, according to the Yonhap News Agency.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.