South Korea’s won climbed the most in two weeks on optimism the nation’s economic recovery is on track after exports increased for a 10th consecutive month in August. Bonds rose.
Government data showed overseas shipments, which account for about half of gross domestic product, increased 29.6 percent from a year earlier after gaining a revised 28.3 percent the previous month. The Economy Ministry today forecast a trade surplus of $32 billion for 2010, compared with a previous estimate of $20 billion. Overseas investors have pumped $7.1 billion into South Korean shares so far this year, with the benchmark index advancing 4.2 percent.
“Growth in exports is high and the Korean stock market is strong,” said Peter Park, a fixed-income analyst at Woori Investment & Securities in Seoul. “It drives appreciation pressure on the won.”
The won appreciated 0.6 percent, the most since Aug. 17, to 1,192.05 per dollar as of 10:19 a.m. in Seoul, according to data compiled by Bloomberg. The currency may strengthen to 1,101 by the end of the year, Park said.
Government bonds gained for a second straight day, with the yield on the 5 percent note due in June 2020 dropping three basis points to 4.36 percent, according to prices from Korea Stock Exchange. A basis point is 0.01 percentage point.
Consumer prices rose 2.6 percent in August from a year earlier, the same pace of gain as in July, the statistics office said today. The figure matched the median estimate of economists surveyed by Bloomberg News. Prices rose 0.3 percent from July.