The Korea Herald

지나쌤

Currencies weaken to dollar after Trump's victory

By 박세환

Published : Nov. 19, 2016 - 11:58

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The currencies of 15 emerging markets have all weakened against the U.S. dollar as the election of Donald Trump to the U.S. presidency sparked concerns about capital outflow, data showed Saturday.

The foreign exchange rate of 15 emerging countries, including South Korea, rose against the greenback as of Thursday, meaning a weakening of currency value, compared with Tuesday when Trump won the presidential election, according to Daishin Securities Co.

Currency trader in S. Korea (Yonhap) Currency trader in S. Korea (Yonhap)
The FX rate of Mexico's peso rose 8.83 percent to the dollar, the sharpest fall in value among the countries, followed by 7.03 percent of South Africa's rand exchange rate and 6.19 percent of Brazil's real FX rate, the data showed.

The South Korean won's FX rate gained 3.6 percent against the dollar, making it the sixth worst performer among them.

Trump's victory has raised concerns about policy uncertainty because of his campaign pledges to focus on boosting the U.S. economy and take a protectionist stance on trade. Uncertainty is prodding investors to pull money out of emerging markets, weakening their currencies relative to the dollar.

Emerging countries' share prices also took a beating by currency falls and capital flight, the data showed.

Among the 15 emerging markets, twelve emerging markets saw their stock prices decline, except for South Africa, China and Russia, it said.

South Korea's stock prices fell 2.72 percent in the cited period, pushing foreign investors' net sale of local stocks to 1.09 trillion won (US$931.4 million) on the main bourse.

"Since Trump's win, capital flight from the emerging market has continued," said Kim Se-chan, an analyst at Daishin Securities Co.

"Their currencies and stock prices are likely to be under pressure for the time being due to heightened uncertainty." (Yonhap)