Today South Korea decided to increase its interest rates to 1.5% from its record low of 1.25% but despite that the currency fell.
As far as I know increase in interest rates should appreciate a currency because of an increase in demand for that currency. Is it because a lot of people were using the Won for carry trade and had to suddenly sell because of an increase in interest rates? Or is it because of some other reason?
Thanks
BUMP
Could have been an expectation thing. I don’t follow the Won but the Nov BoE rate hike we saw the same thing. Rate hike and GBP down. The market was pricing for a more hawkish BoE specifically in their forward guidance for 2018.
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