Worst Seen Over for Most Battered Asian Currency After GDP Shock
(Bloomberg) -- A ray of hope seems to be emerging for the won as traders look past Thursday’s shocking South Korea growth data that sent the currency tumbling to a two-year low.
Some investors are turning optimistic about the outlook for the semiconductor industry, a key component of the nation’s export-driven economy, after SK Hynix Inc. -- one of the biggest makers of the memory chips used in mobile devices -- forecast a recovery in demand this quarter. Weakness in the industry contributed to the unexpected 0.3 percent contraction in first-quarter gross domestic product.
“The won should see the worst within the second quarter, then things will start getting better,” said Ha Keon-hyeong, an economist at Shinhan Investment Corp. in Seoul. “South Korea’s exports are expected to show a clear rebound at the end of the second quarter as demand grows from China.”
The won rose 0.1 percent against the dollar on Friday after slumping as much as 0.9 percent to 1,161.40 on Thursday, its weakest level since March 2017. It is down 3.8 percent this year, and is Asia’s worst-performing currency.
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