Won Falls Most in a Week as Regional Currencies Drop, China Data

The won fell by the most in a week as Asian currencies declined and a report showed factory output shrank in China, South Korea’s biggest overseas market.

The Bloomberg JPMorgan-Asia Dollar Index, which tracks the region’s 10 most-active currencies, dropped for a fifth day. The preliminary Purchasing Managers’ Index for Chinese manufacturing was 48.3 in April, HSBC Holdings Plc and Markit Economics reported today. That’s the fourth straight month of a reading below 50, the dividing line between contraction and expansion.

The won depreciated 0.2 percent, the most since April 14, to close at 1,039.75 per dollar in Seoul, data compiled by Bloomberg show. It touched 1,031.55 on April 10, the strongest level since August 2008, and its 2.4 percent rally this month is the best among 11 Asian currencies tracked by Bloomberg.

“Investors based overseas and local importers appeared to be buying dollars,” said Bak Jae Sung, a Seoul-based currency trader with Woori Bank Co. “Exporters were selling the U.S. currency whenever the exchange rate rose above 1,040.”

One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose 16 basis points, or 0.16 percentage point, to 6.76 percent, the data show.

South Korea’s economy probably expanded 0.8 percent in the first quarter from the previous three months, the median estimate in a Bloomberg survey of analysts showed before a central bank report due tomorrow.

The yield on the 3.125 percent government bonds due March 2019 fell one basis point to 3.18 percent, according to Korea Exchange data.

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