South Korea’s won fell for a fourth day against the dollar, heading for the longest losing streak in 11 weeks, as concerns intensified that Asian economic growth will weaken and before the Bank of Korea meets Friday to set interest rates.
The won dipped 0.7 percent to 1,173.80 per dollar as of 11:18 a.m. in Seoul after touching 1,175.65, the weakest since March 17, prices from local banks compiled by Bloomberg showed. It was the worst performer across emerging markets after Malaysia’s ringgit as the greenback gathered strength on prospects the Federal Reserve will raise U.S. interest rates this year.
“The dollar’s rebound and existing worries about emerging economies including China are pressuring the currency markets,” said Paik Seok Hyun, an economist at Shinhan Bank. “It’s not just the won, but other currencies that have taken a hit.” Paik estimates the won will range between 1,160 and 1,185 through next week.
China today reported that consumer-price gains held below the government’s target pace, though factory-gate deflation narrowed more than expected. A report over the weekend showed imports declined for an 18th month in Asia’s largest economy.
The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, remained steady at 1,183.67 after climbing 1.5 percent last week, the most since Nov. 6. The MSCI Emerging Markets Currency Index was down 0.2 percent, set for a seventh straight decline. South Korea’s Kospi share index rose 0.4 percent, but foreign investors were sellers of a net 40 billion won ($34 million) of local stocks.
South Korea’s 10-year government bond yield was steady at 1.76 percent, according to Korea Exchange. The three-year yield was also unchanged at 1.41 percent.