Goldman Asset Stops Shorting Won Amid Longest Rally Since 2013by
Korea's currency has gained 3.1% in seven-day winning streak
Most economists see central bank holding key rate this week
The won rose for a seventh day after Goldman Sachs Asset Management exited bets the currency would weaken and on signs the Bank of Korea will keep borrowing costs on hold as its global counterparts ease.
Given its more benign view of commodities, Goldman reduced its short positions in the won to flat, the lender said in a note on Friday. A Bloomberg gauge of raw material prices rose the most since July 2012 last week, an indication China may not be headed for a hard landing. Most economists predict the Bank of Korea will keep its policy rate at a record low 1.5 percent on March 10, while the European Central Bank is expected to deliver a package of easing measures the same day before the Bank of Japan meets March 15.
The won rose 0.2 percent to 1,201.43 a dollar in Seoul, data compiled by Bloomberg show. The currency has rallied 3.1 percent in seven days, the longest streak since December 2013. That’s pared its loss this year to 2.4 percent, still the worst in Asia.
“We have receding global growth fears and expectations of liquidity injections from the ECB and the BOJ," said Moh Siong Sim, a foreign-exchange strategist at Bank of Singapore Ltd. in the city-state. A rate hold in Korea will be supportive of the won, he said.
Eleven of 18 economists surveyed by Bloomberg see the BOK leaving its rate at 1.5 percent, with the rest projecting a cut to 1.25 percent. Funds based overseas have bought a net $1.1 billion of South Korean stocks this month, exchange data show.
Ten-year sovereign bonds rose for the first time in five days, pushing the yield down two basis points to 1.87 percent, Korea Exchange prices show. The three-year yield dropped two basis points to 1.51 percent.