After several sessions of strong risk aversion affecting emerging market currencies, optimism returned among traders on expectations that an European Union proposal to rescue Greece will boost appeal for riskier assets, allowing the won to outperform other Asian currencies.
The following days will be decisive to determine the market sentiment among traders as a EU summit later this week is likely to include a helping plan from some European Union members to rescue Greece from its fiscal crisis, if the country succeed on implementing measures expected by the bloc’s central bankers. These expectations allowed the won to gain considerably versus a weaker greenback today, since optimism shifted the market scenario after more than a week of losses for the euro and higher yielding currencies, such as the South Korean won.
The South Korean currency is strongly related to the economic situation in the Eurozone, in one hand, Europe’s economic bloc is a leading destination for South Korean manufactures ranging from eletronics to heavy machinery, while in the other hand, Korea’s financial profile is considered as an emerging market and therefore a
USD/KRW traded at 1,157.50 as of 23:30 GMT from a previous opening rate of 1,171.1.
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