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Korean won hits fresh 2-year low vs dollar

July 21, 2015
(NEWSis)

(NEWSis)

SEOUL, July 21 (Yonhap) — The South Korean won fell to the lowest level in two years against the U.S. dollar on Tuesday as market players are increasingly paying attention to a potential rate hike in the U.S. after the Greek debt issue fizzled out, dealers said.

The local currency closed at 1,158.30, down 6.2 won from the previous session’s close.

Dealers said foreign investors are pulling their money out of the local stock market on growing bets that an increase in U.S. borrowing costs will be made this year.

Also, a slump in the Chinese stock market fueled foreign sell-offs in some emerging markets, they said.

“Expectations of a U.S. rate hike are growing among players, which are also working to prod foreign investors to draw money out of the local stock and bond market,” said Jun Seung-ji, an analyst at Samsung Futures Co.

On Monday, a top Federal Reserve official said the Fed will likely raise rates in September, adding to speculation that a potential rate hike in the world’s largest economy is imminent.

But any sharp devaluation in the local currency may be limited as its recent drop was excessive, dealers said.