Aug. 8 (Bloomberg) -- The won rose for the first time in three days after China’s exports rebounded, easing concern about a slowdown in South Korea’s biggest overseas market. Government bonds gained.
Bank of Korea will closely monitor external conditions and try and respond “in a timely manner,” Governor Kim Choong Soo said in Seoul today after the monetary authority kept its benchmark interest rate unchanged at 2.5 percent. Shipments from China rose 5.1 percent from a year earlier in July, official data showed, surpassing forecasts of a 2 percent gain and recovering from a 3.1 contraction in June.
“China’s release of the better-than-expected trade data lifted market sentiment,” said Jude Noh, chief currency trader at Suhyup Bank in Seoul. “Exporters also sold dollars today.”
The won advanced 0.5 percent to 1,113 per dollar in Seoul after falling 0.4 percent in the previous two days, data compiled by Bloomberg show. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 13 basis points, or 0.13 percentage point, to a three-month low of 6.88 percent.
South Korea is growing “moderately,” led mainly by exports, the Bank of Korea said today. A slowdown in China’s economy and prospects of a tapering of monetary stimulus by the Federal Reserve pose downside risks, the central bank said.
The yield on the 2.75 percent sovereign bonds due June 2016 fell two basis points to 2.93 percent, according to Korea Exchange Inc. prices.
To contact the reporter on this story: Yewon Kang in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: James Regan at email@example.com