Investing.com — Asian currencies fell on Wednesday, with the South Korean won at a two-year low following President Yoon Suk-Yeol’s failed attempt to impose martial law, while the Australian dollar fell to a four-month low on weak gross domestic product. product details.
Market participants were also anxious for a US speech later in the day, which is expected to provide more clarity on interest rates. Regional currencies came under pressure this week from a spike in the dollar, amid growing uncertainty about the long-term outlook for interest rates.
The index was 0.1% higher, rising for the third straight session, and was also higher in the hours in Asia.
S.Korean won at a two-year low amid political turmoil
The South Korean won pair rose 0.1% to 1,416.15 won after rising as high as 1,444.05 won in overnight trading — its highest level since November 2022.
South Korean President Yoon Suk-Yeol declared martial law on Tuesday in an effort to counter “anti-state forces” among his political opponents. However, this move was met with immediate backlash, including parliamentary rejection and public protests, causing him to withdraw the measure within hours.
The gains also offset initial losses when South Korea’s central bank held an emergency meeting to stabilize the domestic market.
South Korea’s Finance Ministry announced on Wednesday that it is prepared to inject “unlimited” liquidity into financial markets, after Finance Minister Choi Sang-mok held talks with the Bank’s governor at a central bank board meeting last night of Korea, Rhee Chang-yong.
South Korean lawmakers have demanded Yoon’s ouster, plunging the country into its biggest political crisis in decades and dampening investor confidence across Asia.
Aussie falls to four-month low as GDP miss spurs interest rate cuts
GDP data showed the country’s economy grew less than expected in the third quarter, raising expectations that the Reserve Bank will cut interest rates earlier in 2025. Quarterly GDP growth also fell below the RBA’s 0.5% forecast.
Weaker GDP was due to weak household spending, while declining export prices also weighed on slowing global commodity demand. The outcome led to predictions that weakness in the Australian economy would prompt the RBA to initiate an easing cycle earlier in 2025.
ANZ and Westpac currently expect the RBA to start cutting rates from May 2025, in what is expected to be a mild easing cycle.
