Won Falls Most in Three Weeks as China Data Damp Global Outlook

  • Foreign funds net sell South Korean shares for second day
  • Three-year bonds advance before BOK reviews policy Thursday

South Korea’s won fell the most in three weeks after disappointing Chinese economic data deepened concerns about global growth.

China, South Korea’s biggest overseas market, on Tuesday reported exports in February shrank the most since 2009 and imports slumped for the 16th month. South Korean shipments have contracted for 14 straight months, the government said last week. Foreign funds sold more local stocks than they bought for a second day, paring this month’s inflows, exchange data show.

The won declined 0.8 percent, the most since Feb. 17, to 1,216.19 a dollar in Seoul, according to data compiled by Bloomberg. The currency has pared this month’s gain to 1.7 percent. It remains Asia’s worst performer in 2016, having dropped 3.6 percent.

“China’s exports were bad and that pushed the won lower," said Jeon Seung Ji, a foreign-exchange analyst at Samsung Futures Inc. in Seoul. “The global economy isn’t doing well."

Three-year government bonds rose for a third day before the Bank of Korea’s board meets on Thursday to review monetary policy. Eleven of 18 analysts in a Bloomberg survey expect the central bank to keep the key rate at a record low 1.5 percent, with the rest expecting a cut to 1.25 percent.

South Korea faces large external uncertainties, including a slowing Chinese economy, Federal Reserve’s policy tightening and low oil prices, the Finance Ministry said in a monthly economic report on Wednesday.

The yield on notes due December 2018 dropped one basis point to 1.48 percent, Korea Exchange prices show. That on benchmark 10-year bonds was little changed at 1.85 percent.

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