Home

The Korea Herald

Latest news

Most Popular

  1. 1

    Contentious grain bill put directly to plenary meeting for vote

    Contentious grain bill put directly to plenary meeting for vote
  2. 2

    Yoon's approval rating plunges to all-time low

    Yoon's approval rating plunges to all-time low
  3. 3

    Will tug-of-war between doctors, government end soon?

    Will tug-of-war between doctors, government end soon?
  4. 4

    Climate impacts set to cut 2050 global GDP by nearly a fifth

    Climate impacts set to cut 2050 global GDP by nearly a fifth
  5. 5

    Trilateral talks acknowledge ‘serious’ slumps of won, yen

    Trilateral talks acknowledge ‘serious’ slumps of won, yen
  1. 6

    [Graphic News] More Koreans say they plan long-distance trips this year

    [Graphic News] More Koreans say they plan long-distance trips this year
  2. 7

    [KH Explains] Hyundai's full hybrid edge to pay off amid slow transition to pure EVs

    [KH Explains] Hyundai's full hybrid edge to pay off amid slow transition to pure EVs
  3. 8

    North Korea removes streetlights along cross-border roads with South

    North Korea removes streetlights along cross-border roads with South
  4. 9

    Russia's denial of entry of S. Korean national unrelated to bilateral ties: Seoul official

    Russia's denial of entry of S. Korean national unrelated to bilateral ties: Seoul official
  5. 10

    Farming households dip below 1m for first time in 2023

    Farming households dip below 1m for first time in 2023
피터빈트

Financial markets face lackluster month as U.S. rate issue resurfaces

Fed could conduct hike in October: FOMC member

By 김연세

Published : Oct. 2, 2015 - 15:58

    • Link copied

South Korea’s financial market is likely to face another tough test this month as the possibility of a base rate hike in the U.S. has come to the fore again, even as many market participants had expected it to remain unchanged for two more months.

The nation’s stocks and currency appeared to be rising after the Chuseok holidays in late September. But the benchmark KOSPI dropped and the won lost ground against the U.S. dollar again on Friday after gaining for the second consecutive trading session.

The possibility that the Federal Reserve could choose to raise the rate in the next meeting of the Federal Open Market Committee, slated for Oct. 27-28, has emerged overnight from remarks of one of the FOMC’s 10-member rate-setting panel.
 

                                                   The New York Stock Exchange building on Wall Street (AP)                                                    The New York Stock Exchange building on Wall Street (AP)

The Fed’s Richmond unit president Jeffrey Lacker picked the improvement in private consumption and employment across the U.S. as strong factors that could lead to a hike this month.

Lacker was quoted by a U.S. media outlet, as saying that “Fed officials will have more information about the strength of consumer spending when their next meeting begins.”

He also reportedly said, “We (the 10 members) will have another labor market report. Presumably that will move us further toward labor market improvement.”

The global markets are particularly focusing on the September employment figures, which will be unveiled at 8:30 a.m. on Oct. 2 EDT in Washington, while analysts say the number of newly employed in the nonagriculture sector are estimated to have surpass the market consensus of 201,000.

An economist from investment bank UBS also highlighted the coming employment data in his interview with a U.S. broadcaster, predicting the Fed will be pressured to raise the rate at a fast pace given that the index indicates economic growth.

On the Korean bourse, foreigners stopped their two-day equity buyer position, net selling stocks worth 125 billion won ($105 million).

The KOSPI fell by 9.64 points, or 0.49 percent, from a trading session earlier to close at 1,969.68. Samsung Electronics, whose market cap is No. 1 on the main bourse, lost 1.32 percent to finish at 1.119 million won.

The dollar rose 4.4 won from the previous session to finish 1,180.7 won. The Korean currency also posted weakness against the Japanese yen and the euro.

Meanwhile, more local analysts seem to have scrapped their projection that the Bank of Korea would conduct a key rate cut once more in the next monetary policy committee meeting, scheduled for Oct. 15.

Apart from the risks from the likelihood of a U.S. rate hike, the BOK minutes, publicized on Sept. 30, lowered the possibility of a cut in Korea.

“The seven-member committee unanimously picked a freeze for the September rate-setting. The fact that nobody sought a cut last month hints at a freeze again this month,” said a stock analyst on TV.

By Kim Yon-se (kys@heraldcorp.com)

More from Headlines