Korean Won Set for Weekly Gain on Ship Orders, Bernanke Comments
The won was poised for a weekly gain after a major South Korean shipbuilder won an overseas order and as Federal Reserve Chairman Ben S. Bernanke calmed concern the monetary authority will scale back its stimulus.
Daewoo Shipbuilding & Marine Engineering Co. received a 665.3 billion won ($593 million) drillship contract, the company said in a regulatory filing today. Ship deliveries, which as recently as 2011 were South Korea’s biggest exports, increased last month for the first time in a year amid a resurgence in global trade. It is “way too early to make any judgment” on starting tapering in September, Bernanke told lawmakers yesterday, a month after indicating that the monetary authority may start cutting the bond-buying program this year.
“There is speculation exporters sold dollars from the overseas deals, which must have boosted the won,” said Han Sung Min, a currency trader at Busan Bank in Seoul.
The won rose 0.2 percent this week and 0.3 percent today to 1,125.48 per dollar as of 11:35 a.m. in Seoul, according to data compiled by Bloomberg. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell 31 basis points, or 0.31 percentage point, to 8.15 percent.
Group of 20 nations must coordinate efforts to tackle an end to the Fed’s stimulus, South Korean Finance Minister Hyun Oh Seok said yesterday in Moscow before a meeting of G-20 finance chiefs and central bankers starts today.
The yield on the 2.75 percent government notes due June 2016 fell four basis points to 2.85 percent this week, according to Korea Exchange Inc. prices. It declined one basis point today.
To contact the reporter on this story: Yewon Kang in Seoul at firstname.lastname@example.org