Won Rises Most in a Week as Kospi Rebounds With Global Equities

Updated on
  • Jobless rate falls to 3.6 percent, lowest since January
  • Central bank seen keeping borrowing costs unchanged Friday

The won rose the most in a week as a rebound in global equities spurred demand for emerging-market assets.

The government revealed an unprecedented 2016 budget on Tuesday to revive growth in Asia’s fourth-biggest economy, after exports slumped in August by the most since 2009. Sixteen of 18 economists surveyed by Bloomberg see the Bank of Korea keeping the seven-day repurchase rate at 1.5 percent on Friday, while two forecast a 25 basis-point reduction.

“The gain in the won is in line with other currencies with a weaker dollar overnight,” said James Huh, an economist at Samsung Securities Co. in Seoul. “We expect the BOK to keep the benchmark rate unchanged as it can still wait and see for several months. The budget is a positive.”

The currency advanced 1 percent to close at 1,189.39 against the greenback in Seoul, data compiled by Bloomberg show. It has slumped 8.3 percent in 2015 and fell to a five-year low of 1,208.72 on Tuesday. The Bloomberg Dollar Spot Index dropped 0.4 percent overnight, halting a four-day gain.

South Korea’s jobless rate fell to 3.6 percent in August, from 3.7 percent the previous month, according to government data on Wednesday. That compares with the median estimate of 3.8 percent in a Bloomberg survey.

The Kospi index climbed 3 percent, the biggest gain since December 2011. The yield on the nation’s 10-year government bonds climbed one basis point to 2.25 percent, Korea Exchange prices show. The three-year yield was steady at 1.68 percent.