The won gained for a second week after South Korea’s shipbuilders won overseas orders and as the Federal Reserve calmed concern the monetary authority will scale back its stimulus. Government bonds rose.
Daewoo Shipbuilding & Marine Engineering Co. received two drillship contracts worth a total of 1.9 trillion won ($1.7 billion), the company said in regulatory filings this week. Samsung Heavy Industries Co. got a 1.17 trillion won drillship order, it said July 15. Ship deliveries, which as recently as 2011 were the nation’s biggest exports, increased last month for the first time in a year amid a resurgence in global trade.
“There is speculation exporters sold dollars from the overseas deals, which must have boosted the won,” said Han Sung Min, a currency trader at Busan Bank in Seoul.
The currency rose 0.2 percent this week and 0.4 percent today to 1,121.75 per dollar in Seoul, according to data compiled by Bloomberg. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell 42 basis points over the past five days and 23 basis points today to 8.04 percent.
It is “way too early to make any judgment” on starting tapering in September, Fed Chairman Ben S. Bernanke told lawmakers yesterday, a month after indicating that the central bank may this year start cutting the bond-buying program that has spurred the flow of funds to emerging markets.
Group of 20 nations must coordinate efforts to tackle an end to the Fed’s stimulus, South Korean Finance Minister Hyun Oh Seok said yesterday in Moscow before a meeting of G-20 finance chiefs and central bankers starting today.
The yield on the 2.75 percent government notes due June 2016 fell five basis points, or 0.05 percentage point, this week to 2.84 percent, according to Korea Exchange Inc. prices. It declined two basis points today.