Korea’s Won Climbs to One-Week High as Regional Currencies Gain

The won advanced for a second day to a one-week high as gains in regional currencies boosted demand for South Korean assets.

Australia’s dollar climbed to the strongest in more than a week after data today showed the nation’s trade surplus in January was wider than economists expected. China’s yuan headed for its biggest two-day rally since December 2011. Overseas investors bought more South Korean equities than they sold for a second day, exchange data show.

The won appreciated 0.6 percent to close at 1,064.13 per dollar in Seoul, according to data compiled by Bloomberg. It touched 1,064.05 earlier, the highest since Feb. 28. The currency’s 50-day moving average was at 1,067.81.

“The Aussie gaining and the yuan stabilizing supported risk sentiment,” said Cho Young Bok, a Seoul-based currency dealer for Daegu Bank. “The 1,068 level was regarded as the technical support line for the greenback, and there was unwinding of long-dollar positions after the exchange rate fell below that.” A long position is a bet an asset will appreciate.

One-month implied volatility, a gauge of expected moves in the won used to price options, declined 19 basis points to 7.33 percent.

JPMorgan Chase & Co. recommends exiting long positions on 10-year Korean government bonds, analysts including Bert Gochet wrote in a note today, saying central bank governor nominee Lee Ju Yeol isn’t the “dovish” candidate it had expected. President Park Geun Hye nominated the former Bank of Korea official to replace Kim Choong Soo, whose four-year term ends March 31.

The yield on the benchmark 3.25 percent notes due September 2018 fell one basis point, or 0.01 percentage point, to 3.19 percent, according to Korea Exchange Inc. prices. That’s the lowest rate this week. The 10-year yield was steady at 3.57 percent.

Overseas investors were net-sellers of the three- and 10-year bond futures today, exchange data show.

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