- Currency climbs to three-month high, after weakening 0.3%
- China is the No. 1 destination for South Korean exports
The won reversed earlier losses and rose to a three-month high after economic growth in China, South Korea’s biggest export market, topped forecasts.
China’s gross domestic product increased 6.9 percent from a year earlier in the last three months, compared with a median estimate of 6.8 percent in a Bloomberg survey. Expansion in South Korea is expected to have quickened in the third quarter, economists predict before data due Friday.
The won strengthened 0.7 percent to close at 1,121.14 a dollar in Seoul, after earlier weakening as much as 0.3 percent, data compiled by Bloomberg show. It touched 1,120.61, the strongest since July 3. The currency has gained 5.7 percent this month, the best performance in Asia after Indonesia’s rupiah, as speculation eased that the U.S. will raise interest rates in 2015.
“There were concerns about slower growth in China affecting regional economies and today’s headline number helped calm these,” said Hong Seok Chan, a currency analyst at Daishin Economic Research Institute in Seoul. "That puts upward pressure on the won."
A two-week festive shopping campaign called Korea Black Friday that started on Oct. 1 led to a 21 percent increase in sales at 22 large retailers from a year earlier, according to an e-mailed statement from the Finance Ministry on Sunday. The event will contribute to a 0.1 percentage point rise in GDP in the fourth quarter, it said.
South Korea’s economy expanded 2.4 percent from a year earlier in the three months through September, compared with 2.2 percent in the prior quarter, according to the median estimate in another Bloomberg survey before Friday’s report.
Government bonds fell, with the 10-year yield rising two basis points to 2.09 percent, Korea Exchange prices show. The three-year yield was steady at 1.63 percent.