Because the won-dollar trade fee approaches 1,480 gained, internet purchases of U.S. shares by home particular person traders, often called “Seohaggaemi,” have declined sharply.
In line with the Korea Securities Depository on Dec. 16, home traders internet bought $228.28 million (roughly 337.3 billion gained) value of U.S. shares from Dec, 6 to 12. This represents a 77.35% lower in comparison with the earlier week’s internet purchases of $1.007 billion (roughly 1.489 trillion gained).
The decline is much more pronounced when in comparison with two weeks prior, when internet buy settlements reached $1.369 billion (roughly 2.024 trillion gained). Whereas home traders proceed to internet buy U.S. shares, the size of internet purchases has considerably contracted. That is interpreted as the results of home traders lowering their funding scale because of the burden of foreign money trade for U.S. inventory purchases amid the current sustained excessive ranges of the won-dollar trade fee.
Throughout this era, the won-dollar trade fee within the Seoul overseas trade market rose 4.9 gained from 1,468.8 gained to 1,473.7 gained primarily based on weekly closing costs (as of three:30 PM). Significantly on Dec. 13, the trade fee reached 1,477.0 gained in in a single day buying and selling, approaching the 1,480 gained degree intently.
Because the trade fee continued to rise, overseas trade authorities held an emergency assembly on Dec. 14, which was a Sunday, to debate response measures. The truth that an emergency assembly was convened on a vacation afternoon is interpreted as indicating appreciable vigilance by authorities relating to overseas trade market volatility. Nonetheless, authorities didn’t subject any separate message relating to the assembly outcomes.
Moon Jung-hee and Lee Min-hyuk, economists at KB Kookmin Financial institution, analyzed, “Final week, amid renewed considerations about synthetic intelligence (AI) bubbles, provide and demand imbalances together with regional greenback demand superiority overlapped, inflicting the trade fee to shut increased once more within the 1,470 gained vary.”
They acknowledged, “This week, main nation financial coverage conferences together with the European Central Financial institution (ECB) and Financial institution of Japan (BOJ) are scheduled, together with U.S. employment indicators,” and projected, “If U.S. employment weak point is confirmed together with hawkish coverage stances from the ECB and BOJ, differentiation in financial insurance policies from the Federal Reserve System may very well be highlighted, probably resulting in greenback weak point.” They added that on this case, the dollar-won trade fee might transfer in a downward course this week. They advised a fluctuation vary of 1,440 gained to 1,480 gained per greenback for this week.
Park Sang-hyun, a researcher at iM Securities, stated, “The December Federal Open Market Committee (FOMC) assembly outcomes had been interpreted as dovish relatively than hawkish fee cuts, opposite to market considerations, increasing greenback weak point stress.” Nonetheless, researcher Park famous, “The dollar-won trade fee confirmed notably expanded weak point as a result of considerations about additional gained weak point haven’t been sufficiently resolved regardless of overseas internet inventory purchases.”
He continued, “With the dollar-won trade fee threatening year-high ranges, consideration focuses on whether or not overseas trade authorities will intervene,” including, “This week, Financial institution of Japan financial coverage and the unfold of AI bubble controversy might enhance trade fee volatility.” Researcher Park advised a dollar-won trade fee band of 1,450 gained to 1,490 gained for this week.
In the meantime, an evaluation from Financial institution of America anticipated the Korean gained to complete 2025 at its weakest degree since 2012 as portfolio outflows proceed to stress the foreign money.
Regardless of elevated rhetoric from Korean authorities officers over the previous month trying to defend the gained, the won-dollar trade fee is approaching the 1,480 degree, the evaluation famous. It recognized rising internet portfolio outflows as the first driver behind the gained’s ongoing depreciation.
