Won Snaps Five-Day Gain on Speculation Importers Bought DollarsYewon Kang
The won halted its longest run of gains in two months on speculation importers bought dollars after the South Korean currency rallied 2.6 percent over the previous five days. Government bonds advanced.
The won slipped 0.2 percent to 1,134.03 per dollar in Seoul, according to data compiled by Bloomberg. It rose 0.3 percent to 1,129.5 earlier, the strongest level since June 18. The currency has weakened 6.1 percent this year.
Exports fell 0.9 percent in June from a year earlier, compared with a 3.2 percent advance in April and the median estimate for a 0.1 percent increase in a Bloomberg survey, official data showed yesterday. Samsung Heavy Industries Co. received an 825.5 billion won ($728 million) contract for a semi-submersible rig and Daewoo Shipbuilding & Marine Engineering Co. got a 469.6 billion won order for two ships, the companies said in separate filings.
“Importers are pursuing dollars to pay the bills, which must have offset the amount of the dollars sold by heavy industry companies from the orders abroad,” said Jude Noh, chief currency trader at Suhyup Bank in Seoul. “It’s a thin market today, the currency’s movement may be limited in either direction.”
Goldman Sachs Group Inc. said in a report yesterday that South Korean exports are likely to recover in the coming months, while renewed weakness in the yen could hurt some industries, especially automobiles, auto parts, steel and machinery.
One-month implied volatility in the won, a gauge of expected moves in the exchange rate used to price options, fell 58 basis points, or 0.58 percentage point, to 10.48 percent, the data show. This was the sixth day of decline.
The yield on the 2.75 percent government bonds due June 2016 fell six basis points to 2.94 percent, prices from Korea Exchange Inc. show.