Korean Won Approaches 1-Year High as U.S. Data Spur Risk-Taking

South Korea’s won climbed toward an almost one-year high and government bonds fell as consumer data from the U.S. supported demand for riskier assets.

Retail sales increased 1.1 percent in the world’s largest economy last month, beating the 0.8 percent gain forecast in a Bloomberg survey, figures showed yesterday. The Kospi (KOSPI) index rose the most in a month even as overseas investors sold more local shares than they bought for a fourth day. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies outside Japan, rose to the highest level since March.

“The U.S. data was positive and demand for safer assets has weakened,” said Han Sung Min, a Seoul-based currency trader for Busan Bank. “I expect the won’s appreciation trend to continue.”

The won advanced 0.3 percent to 1,107.19 per dollar at the close in Seoul, according to data compiled by Bloomberg. The currency touched 1,106.13 earlier, the strongest level since 0ct. 31, 2011. One-month implied volatility, a measure of exchange-rate swings used to price options, slipped 36 basis points, or 0.36 percentage point, to 5.79 percent.

The yield on the 3.25 percent notes due June 2015 climbed one basis point to 2.78 percent, Korea Exchange Inc. prices show. The one-year interest-rate swap rose four basis points to 2.82 percent.

To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.