Korean Won Declines on Global Economy Concern; Bonds Steady
China reported an unexpected trade surplus for last month as import growth trailed forecasts, data showed today. Its inbound shipments increased 5.3 percent, below the 9 percent median estimate in a Bloomberg News survey, while exports rose 8.9 percent from a year earlier. Figures last week showed hiring by American employers in March trailed the most-pessimistic forecast. North Korea may test a nuclear weapon after a planned missile launch between April 12 and 16, a South Korean intelligence report showed yesterday.
“China’s trade figures may have looked positive at a glance, but a deeper analysis led to doubts about economic growth, prompting some investors to buy the dollar” said Kim Do Hee, a Seoul-based currency trader at Australia & New Zealand Banking Group. “Geopolitical risks on the Korean peninsula also prevented won gains.”
The won slid 0.1 percent to 1,139.70 per dollar at the close in Seoul, according to data compiled by Bloomberg. It touched 1,139.93 earlier, the lowest since March 26. One-month implied volatility for the won, a measure of exchange-rate swings used to price options, declined one basis point, or 0.01 percentage point, to 8.43 percent. The Kospi Index (KOSPI) of shares slid 0.1 percent. South Korea’s financial markets are closed tomorrow for parliamentary elections.
The yield on South Korea’s 3.25 percent bonds due December 2014 was steady at 3.5 percent, Korea Exchange Inc. prices show. Three-year debt futures were little changed at 103.99 and the one-year interest-rate swaps lost one basis point to 3.51 percent.
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