Won Advances as South Korean Exporters Seen Repatriating Dollars

The won rose on speculation South Korean exporters sold dollars to settle month-end bills.

The currency also rebounded after last week’s decline that was the biggest in almost two months as exchange data show global investors ended two days of net sales of local equities. Morgan Stanley remains bullish on the won, the bank said in a June 19 report, citing growth in the nation’s economy and trade as well as inflows to Korean bonds arising from reserves diversification by foreign central banks.

“The market is likely to receive quite a bit of dollar supplies as the month end approaches,” said Jahng Won, a Seoul-based currency trader at Shinhan Bank. “Further strength in the won is likely to be limited as traders remain cautious about intervention.”

The won advanced 0.2 percent to close at 1,018.53 per dollar in Seoul, data compiled by Bloomberg show. The currency has gained more than 13 percent in the past year and touched 1,015.25 on June 10, the highest since August 2008.

One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose 11 basis points, or 0.11 percentage point, to 4.84 percent.

The yield on the 2.75 percent bonds due June 2017 rose two basis points to 2.69 percent in Seoul, Korea Exchange prices show. The 10-year yield added one basis point to 3.23 percent.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE