Won Gains for Fifth Day in Longest Rising Streak Since October

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  • Currency rises to two-week high after U.S. data tops estimates
  • Ten-year bond yield at four-week high as inflation picks up

South Korea’s won climbed for a fifth day in the longest run of gains since October as U.S. jobs data supported an emerging-market rally.

The currency rose to a two-week high after a private report released Wednesday showed American employers added more workers than expected in February, adding to optimism following China’s cut of banks’ reserve requirements on Monday. Sovereign bonds fell for a third day as inflation beat estimates. Around a third of economists surveyed by Bloomberg expect the Bank of Korea to cut its policy rate this month to revive growth.

"Weakening risk-off sentiment is supporting the won," said Masashi Murata, a vice president at Brown Brothers Harriman & Co. in Tokyo. The accelerating inflation doesn’t make a rate cut less likely as it’s still well below the central bank’s 2 percent target, he said.

The won appreciated 1 percent to close at 1,214.8 a dollar, taking its five-day gain to 2 percent, according to data compiled by Bloomberg. That pared its loss this year to 3.5 percent, still the worst in Asia. The 10-year bond yield rose four basis points to a four-week high of 1.86 percent, Korea Exchange prices show. The three-year yield increased four basis points to 1.50 percent.

Consumer prices rose 1.3 percent in February from a year earlier, more than 0.8 percent in January and the 0.9 percent median estimate in a Bloomberg survey. Eight of 23 analysts forecast the central bank will cut to 1.25 percent on March 10, with the rest seeing the benchmark rate being left at 1.5 percent.

Inflation is unlikely to quicken further, so the weakness in Korean government bonds should be limited, said Myeong Sil Kim, a fixed-income analyst at KB Investment & Securities Co., Ltd.

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