Korean Won Falls as Trade Data Overshadowed Before Yellen SpeechBy
Current account added to record surplus run in October
Global funds continue to offload Korean shares on Fed odds
The won closed weaker for a fifth day before a speech by Federal Reserve Chair Janet Yellen, who may give insight to the path of potential U.S. interest-rate increases that have spurred South Korean outflows.
The currency reversed an earlier gain on speculation traders exited positions that were betting on a decline in the dollar, according to Suhyup Bank in Seoul. With odds of U.S. monetary tightening in December at 72 percent, overseas funds sold a net $259 million of Korean shares on Wednesday, even after data showed the nation’s current account remained in surplus for a record 44th month in October.
“Foreigners’ net sales in the local stock market helped the dollar reverse higher,” said Jude Noh, chief foreign-exchange trader at Suhyup Bank. “Offshore investors are piling into dollar-buying before the speech by the Fed chair.”
The won declined 0.5 percent, the most since Nov. 16, to 1,164.38 versus the greenback in Seoul, data compiled by Bloomberg show. The currency strengthened as much as 0.4 percent to 1,153.65 earlier on the back of the trade numbers. A gauge tracking the dollar against 10 major peers rose 0.14 percent.
The won fell 1.5 percent in November as global funds pulled $1.5 billion from the stock market. The current-account surplus was $8.96 billion in October, down from September’s $10.54 billion, according to the central bank. That’s still above the $7.6 billion average over the past three years.
Government bonds rose. The 10-year yield dropped one basis point to 2.26 percent and the three-year yield declined by the same amount to 1.76 percent, Korea Exchange prices show.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Musk Takes Down the Tesla and SpaceX Facebook Pages
- Trump Wanted a Trade War. Here’s What One Looks Like
- A Horror Week for the Dow Has Investors Begging for Trump Respite
- Qantas Passes Aviation Milestone With Direct Perth-London Flight
- Stocks Tumble in Biggest Weekly Decline Since 2016: Markets Wrap