The South Korean won hit a 10-month low against the dollar on Friday as worries about the US subprime mortgage sector prompted investors to chase safer assets. The won touched its weakest against the yen in 15 months as fears of a worsening global credit crunch forced a huge unwinding of yen carry trades.
The South Korean currency also weakened on supplies from importers and foreign equity investors, who sold a net 877.5 billion won in shares on Friday, pushing the main market down 3.19 percent.
"The won is expected to fall further, given the impact of the subprime mortgage issue," said an analyst at a local futures firm. But she said it was premature to conclude that the won has reversed its long-term rising trend, saying the market needs to see whether the credit problems will hurt South Korea's exports.
The won was last quoted at 950.3/0.6 per dollar, compared to its previous closing bid of 945.9. It fell as low as 952.2, the weakest since October 26, 2006. The South Korean unit hit a session low of 8.5137 per yen, which is the weakest level since May 23, 2006. Dollar-won spot trading volume reached a record high of $14.38 billion, Seoul Money Brokerage Service Ltd and Korea Money Broker Corp data showed.
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