Korean won rises to strongest in nearly 6 yearsUpdated: 2014-06-10 06:28:25 (KST)
The European Central Bank's easing of monetary policy has driven the Korean won to strengthen even more.
On Monday, the local currency rose zero.4 percent from the previous trading day to close at 1,16.2 won against the greenback.
Experts say this is not a positive development for local exporters.
"I think the won-dollar exchange rate has reached its threshold. With the ECB lowering its benchmark interest rate, the Euro is likely going to join the weakening currency trend of the Japanese yen and Chinese yuan. Those will bring down the price competitiveness of Korean exporters even further."
With the Korean won also hitting its highest level against the yuan in nearly three years on Monday, experts add the strengthening trend will send jitters to Korean exporters, especially because shipments to China are slowing.
Korea's exports to China fell by more than 9 percent in May from a year earlier -- and things are not likely to improve if the won continues to rise.
As for the possibility of the won strengthening past the psychologically-important 1-thousand won mark before the end of September, analysts in Seoul have mixed opinions.
Many are not denying the likelihood, but they also suggest the local currency will weaken in the fourth quarter given that the U.S. economy is on a path of recovery, which could lead the Federal Reserve to raise its key interest rate and strengthen the dollar.
Laah Hyun-kyung, Arirang News.
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