Overview
- Market participants detected dollar-selling in Korea's forward market tied to SK Hynix's U.S. ADR offering, which helped push the won to about 1,498 per dollar on Wednesday, July 8.
- SK Hynix is seeking up to 43 trillion won in the offering, and the company is expected to bring U.S. dollars into South Korea and convert part of the proceeds around July 15.
- Officials and analysts say the flows amount to a near-term dollar-selling, won-buying event, but the final impact will depend on the timing of conversions and how the company and banks hedge or settle the receipts.
- Renewed tensions in the Middle East and higher oil prices on July 9 weakened the won to roughly 1,506 per dollar even as foreign investors continued net buying of Korean stocks.
- Markets will watch the actual arrival and conversion of ADR dollars, hedging and swap activity, and geopolitical or oil-price moves to judge whether the won's strength is sustained and how this will affect local firms and borrowing costs.