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Trump diagnosis to strengthen dollar, but high market volatility not likely: expertsBy Yonhap
Published : Oct. 3, 2020 - 12:16
Trump and first lady Melania Trump tested positive for COVID-19 on Friday, sending Wall Street's main stock indexes lower. The dollar index, a gauge of the greenback's value against a basket of six foreign currencies, rose 0.14 percent.
Analysts said Trump testing positive is expected to raise uncertainty in financial markets, prompting investors to snap up the dollar. But global markets are not likely to post a sharp rise or decline only on the Trump news in light of hopes for new US stimulus measures, they said.
"The FX market is expected to be affected by Trump's symptoms, but there is a slim possibility for the market seeing high volatility with the single issue," a currency analyst said.
South Korea's foreign exchange authorities are also closely monitoring the global financial markets to gauge the impact of Trump's infection.
"As talks for a fresh US stimulus package are gaining traction, it may offset investor sentiment for safe assets," an official at the Bank of Korea said.
"The financial market is not likely to see a herd behavior nor undergo sharp volatility, but we will closely monitor the market," the official added.
South Korea's financial markets closed for the third straight day Friday due to the Chuseok fall harvest holiday.
The country's main stock index rose 0.86 percent to end at 2,327.89 on Tuesday, and the Korean currency closed at 1,169.5 won per dollar, up 4.1 won from the previous session's close.
Global investment bank Citi Bank said the Trump news is not likely to cause forced selling of risky assets, given that uncertainty from the US presidential election has been factored in the market to some degree. (Yonhap)
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