Korea's Won Set for Best Month Since September 2009 on Growth Momentum

South Korea’s won was headed for its biggest monthly increase since September 2009 as economic growth gains momentum, spurring demand for the nation’s assets.

Industrial production rose 16.9 percent in June from a year earlier, the statistics office said today, compared with the median estimate for an advance of 16.5 percent in a Bloomberg News survey. The Bank of Korea this week reported a current- account surplus of $5.04 billion for June, the most in a year.

“I’m reasonably happy with the data as growth is holding up pretty well,” said Brian Jackson, a Hong Kong-based senior emerging-markets strategist at Royal Bank of Canada. “Trade data has been solid, suggesting a fair bit of support from external demand, which is reflected in the industrial output.”

The won appreciated 2.9 percent this month to trade at 1,187.30 per dollar as of 9:27 a.m. in Seoul, according to data compiled by Bloomberg. The currency climbed 1 percent this week and lost 0.1 percent from yesterday.

The won reached a five-week high of 1,181.33 on July 27 before retreating the next day as traders said the Bank of Korea bought dollars to counter appreciation.

“The BOK will try to moderate any gains,” Jackson said. “We are pretty positive on the won, and we are looking for gains in the second half to 1,125 by the end of September.”

The economy grew 1.5 percent in the second quarter from the previous three months, faster than the 1.3 percent growth forecast in a Bloomberg survey, data this week showed.

To contact the reporters on this story: Patricia Lui at plui4@bloomberg.net

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