South Korea’s Won Rises Most in Three Weeks Amid Foreign InflowsMoonyoung Tae
South Korea’s won rose the most in three weeks on speculation the U.S. will push back interest-rate increases and as policy makers in Europe add stimulus.
Global funds bought more Korean stocks and bonds than they sold this week. U.S. industrial output slipped more than economists had projected in March, with the Federal Reserve examining data to determine the best time to raise borrowing costs. European Central Bank President Mario Draghi reaffirmed plans for buying bonds through September 2016 after a policy review Wednesday, boosting demand for emerging-market assets.
The won rose 0.8 percent to 1,088.72 a dollar as of the 3 p.m. close in Seoul, data compiled by Bloomberg show. That’s the biggest increase since March 24.
“We’re still seeing foreign funds buying South Korean assets with a long-term view amid abundant liquidity,” said Son Eun Jeong, a Seoul-based currency analyst at Woori Futures Co. “That’s favorable for the won.”
Government bonds fell, with the yield on the 3 percent sovereign notes due September 2024 rose four basis points, or 0.04 percentage point, to 2.16 percent, Korea Exchange prices show. The three-year yield was steady at 1.73 percent.
U.S. Treasury Secretary Jacob Lew met with South Korean Finance Minister Choi Kyung Hwan in Washington Wednesday and reiterated that the Asian nation must reduce currency-market intervention, the Treasury Department said in a statement.
The U.S. said earlier this month it has stepped up pressure on South Korea to stop intervening and let the won rise, according to a semiannual report on foreign-exchange policies on April 10. The criticism was rebuffed, with Song In Chang, director general at the Finance Ministry, saying there would be no change to its policy of conducting smoothing operations at times of currency volatility.