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S. Korean currency's volatility to US dollar hits 6-year high in 2016

Xinhua, January 19, 2017 Adjust font size:

South Korean currency's volatility to the U.S. dollar hit the highest in six years in 2016 on external uncertainties including the U.S. presidential election and the expected rate hike in the United States, central bank data showed on Thursday.

Daily volatility, which means daily difference between highs and lows in the won/dollar exchange rate, averaged 0.65 percent in 2016, according to the Bank of Korea (BOK). It was higher than the previous year's 0.58 percent, marking the highest since 2010.

The dollar's volatility increased ahead of the U.S. election, which led to the inauguration of President-elect Donald Trump on Friday.

The U.S. Federal Reserve lifted its benchmark rate by a quarter percentage point in December and hinted at three rate increases this year. Uncertainties about the Fed's rate-setting policy expanded the foreign exchange market's volatility.

Volatility for currencies of Group of 20 (G20) member countries posted a daily average of 0.56 percent in 2016, up from 0.53 percent a year earlier.

Higher currency volatility raises currency risks, which may lead to the weakening of global trade and investment in other countries.

As of the end of last year, the won/dollar exchange rate was 1,207.7 won per dollar, up 35.2 percent from a year earlier. It means the South Korean currency's 2.9 percent depreciation to the greenback. Enditem