Won Hit by ‘VaR Shock’ May Face Even More Losses, Banks Say

South Korea’s tumbling won looks set for further declines as higher energy prices threaten growth in the world’s eighth-largest oil consumer, according to forecasters at some of the biggest global banks.

The won slumped more than 4% at one stage on Tuesday, the most since 2010, as concern about the Iran war sapped risk assets and spurred a value-at-risk or VaR shock, in which a cycle of selling sets in. The currency fell beyond the closely watched 1,500 per dollar level to the weakest since the global financial crisis, before retracing some of those losses on Wednesday.