Oct. 30 (Bloomberg) -- South Korea’s won closed 0.6 percent off a two-year high before a Federal Reserve meeting to review its record monetary stimulus. Government bonds rose.
Industrial output fell 3.6 percent last month from a year earlier, compared with the median estimate of a 1.9 percent gain in a Bloomberg survey, official data showed today. The pace of the nation’s economic recovery is weak, Finance Minister Hyun Oh Seok said in Seoul. The Federal Open Market Committee, which will meet later today, will start paring its $85 billion of monthly bond purchases only in March, according to a Bloomberg survey of analysts.
“Investors are not making any risky moves before the FOMC,” said Son Eun Jeong, currency analyst at Woori Futures Co. in Seoul. “The expectation that tapering will be delayed is already priced in, and more clear direction will be set after the meeting.”
The won closed at 1,060.30 per dollar in Seoul, compared with 1,060.62 yesterday, according to data compiled by Bloomberg. The currency touched 1,054.35 on Oct. 24, the strongest level since August 2011. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped three basis points, or 0.03 percentage point, to 5.87 percent.
Industrial output declined in September due to strikes at Hyundai Motor Co. and Kia Motors Corp., and a reduced number of working days because of the Chuseok holidays, said Lee Hyoung Il, director at the Finance Ministry’s Economic Policy Bureau.
The yield on the government’s 2.75 percent sovereign bonds due June 2016 fell three basis points to a four-month low of 2.78 percent, according to Korea Exchange Inc. prices.
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