Won Extends Decline as Brexit Rally Fades With Stocks Retreating

  • Currency’s level has become ‘burdencome’ after gains: Samsung
  • Bonds steady after yields earlier revisited record lows

South Korea’s won fell for a second day after leading a post-Brexit rally in Asia last week as risk appetite waned across the region.

With central banks around the world including South Korea pledging stimulus, Australian policy makers left interest rates unchanged on Tuesday and said the effects on the global economy from the U.K.’s decision to exit the European Union in the June 23 referendum remain to be seen. The Bank of Korea last week announced 20 trillion won ($17.4 billion) of extra spending in the wake of the Brexit vote.

The won weakened 0.8 percent to 1,155.40 per dollar as of the close in Seoul, the biggest slide since June 24, according to prices from local banks compiled by Bloomberg. It rose to a two-month high of 1,143.38 on Friday, the strongest since May 3, as it posted a 3 percent advance for the week. That was the best performance since 2011.

“The won’s current level is burdensome following the recent gains,” said Jeon Seung Ji, a currency analyst at Samsung Futures Inc. in Seoul. “The fall in stocks and foreign investors selling local shares are not helping either.”

The currency led a decline in emerging-markets on Tuesday as the Kospi share index halted a six-day rally. Last week’s gains fueled concern the central bank would intervene by selling won to protect exports, which contracted for an 18th month in June, albeit at the slowest pace in a year.

Government bonds were little changed. The three-year yield fell one basis point to 1.22 percent after earlier reaching a fresh record low of 1.21 percent, and the 10-year yield was steady at 1.42 percent, Korea Exchange prices show.

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