South Korea Won Advances on Speculation Exporters Selling Dollar
The nation’s industrial output probably grew 1 percent in September, a three-month high, a Bloomberg News survey showed before data due next week. The Federal Reserve said yesterday the U.S. economy is still growing modestly and unemployment remains elevated. A government report tomorrow may show South Korea’s economy expanded 1.7 percent in the third quarter, the slowest pace in three years, according to a Bloomberg survey.
“It looks like the won is strengthening after some exporters sold the greenback,” said Kim Dong Young, a Seoul- based currency dealer for Industrial Bank of Korea. (024110) “The appreciation trend for the won is valid as investors keep a positive view on Asia.”
The won advanced 0.2 percent to 1,101.59 per dollar as of 9:39 a.m. in Seoul, according to data compiled by Bloomberg. The currency touched 1,100.03 on Oct. 23, the strongest level since September 2011. One-month implied volatility, a measure of exchange-rate swings used to price options, fell 15 basis points, or 0.15 percentage point, to 5.89 percent.
The cost of processed foods in South Korea is prompting concerns about price instability and inflation, Finance Minister Bahk Jae Wan said at a government meeting today. Bahk Jae Wan said in a Bloomberg News interview on Oct. 9 that economic growth reached a “bottom” in the third quarter.
The yield on the government’s 3.25 percent bonds due June 2015 rose one basis point to 2.82 percent, Korea Exchange Inc. prices show. The one-year interest-rate swap was little changed at 2.78 percent.
“Investors are waiting for the government’s outlook tomorrow for fourth quarter growth, which will help gauge whether South Korea’s economy will rebound,” said Lee Hak Seoung, a fixed-income analyst at Tong Yang Securities Inc. in Seoul.
To contact the reporter on this story: Jiyeun Lee in Seoul at email@example.com