The South Korean won hit a six-week low against the dollar on Friday as gloomy earnings at major domestic companies boosted worries about a slowdown in Asia's fourth-largest economy, hitting local shares. Investors were reluctant to take fresh positions ahead of the Lunar New Year holidays Monday and Tuesday, when financial markets will be closed, and also remained cautious about possible dollar-selling intervention by the country's foreign exchange authorities.
The local currency is expected to decline further as investors shun riskier assets on concerns that economic stimulus packages may not be enough to offset the worst global downturn in decades, analysts said. "The won is more likely to weaken past 1,400 (per dollar) as its recent support line of 1,370 has turned into a strong resistance level," said Jeong My-young, a currency strategist at Samsung Futures Inc.
"Dismal corporate results and economic data confirmed that the global economy is slowing much faster than expected," she added. The won was quoted at 1,390.8/1.0 per dollar as, compared with Thursday's domestic close of 1,378.0. It slid to as low as 1,398.4, its weakest since December 10, 2008.