Korean Won Approaches Five-Week High on Export Orders, China GDPYewon Kang
The won rose toward a five-week high as South Korean exporters including Samsung Heavy Industries Co. reported new overseas orders and after China’s economic growth met forecasts. Government bonds were steady.
Gross domestic product of China, South Korea’s top trading partner, grew 7.5 percent in the second quarter, official data showed today, matching the median estimate in a Bloomberg survey of 45 economists. Daewoo Shipbuilding & Marine Engineering Co. received a 1.25 trillion won ($1.1 billion) contract for drillships, according to a regulatory filing today. Samsung Heavy Industries got a 1.17 trillion won order for drillships, it said in a separate filing.
“China’s economy at least grew in line with estimates, which assured investors, particularly in Asian countries that rely heavily on trade with the country,” said Son Eun Jeong, an analyst at Woori Futures Co. in Seoul. “Korean exporters have shown strong performance overseas, which supported the won.”
The currency gained 0.2 percent to 1,121.88 per dollar in Seoul, according to data compiled by Bloomberg. It touched 1,119.18 on July 12, the strongest level since June 10. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell 18 basis points, or 0.18 percentage point, to 8.28 percent.
The won should outperform regional peers as the “pass-through impact from the U.S. business cycle kicks in,” analysts at Citigroup Inc. including Singapore-based Siddharth Mathur, wrote in a report dated July 11.
The yield on the 2.75 percent government notes due March 2018 was unchanged at 3.13 percent, according to prices from Korea Exchange Inc.