North Korea Tensions Exacerbate China-Driven Kospi, Won Selloff
- South Korea lacks flexibility to stabilize markets on its own
- Economy is exposed if conflict escalates amid China slowdown
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The revival of tensions on the Korean peninsula couldn’t have come at a worse time for South Korea’s currency and stocks, already battered by a wave of selling across emerging markets.
Confidence is dropping in South Korea’s ability to withstand a slowdown in China, its biggest trading partner, and defuse tensions with its neighbor, according to Ankur Patel of R-Squared Macro Management. North Korean leader Kim Jong Un readies his troops for war after exchanging fire across the border earlier this week in what is becoming one of the most serious confrontations in recent years.