The South Korean won fell against the dollar on Monday as a record drop in January exports and grim overseas data bolstered worries about a prolonged recession and its impact on Asia's fourth-largest economy. The won also came under pressure from gloomy corporate results and outlooks, which caused investors to unload riskier assets including local shares.
The local currency is expected to remain weak on persistent worries about an economic slowdown, although it may find some relief from foreign investors' continuous stock purchases and caution over possible dollar-selling intervention by the country's foreign exchange authorities, analysts said.
"The won is likely to weaken past 1,400 (per dollar) as long as investors are caught by concerns over the economy and financial turmoil," said Jeong My-young, a currency strategist at Samsung Futures Inc. "But the unit is not expected to free-fall as it did late last year," she added.
The South Korean currency was quoted at 1,389.9/0.7 versus the US unit as, compared with Friday's domestic close of 1,379.5. South Korean exports suffered their biggest-ever drop in January and sales of the country's five automakers dropped 35 percent from a year ago, adding to worries about the ripple of a global recession on the economy. Seoul shares ended down 1.30 percent.