Won Halts Four-Day Loss as U.S. Rate Odds Cut Before BOK Meetingby
Fifteen of 18 economists see no change at Friday meeting
Kospi share index falls amid mixed regional performance
South Korea’s won rose after posting its longest four-day loss since February as the dollar weakened on diminishing odds for a U.S. rate increase, at least for the next few meetings.
The won advanced 0.4 percent to 1,168.25 per dollar as of 11:11 a.m. in Seoul, according to prices from local banks compiled by Bloomberg. It fell 3 percent in the previous four days and reached 1,175.65 on Tuesday, the lowest level since March 17.
“The market is taking a breather following the recent fall as the extent of the won’s drop has been rather steep," said Chung Sung Yoon, a Seoul-based currency analyst at Hyundai Futures Corp. “Appetite for dollar above 1,170 appears to have weakened for now."
Investors are also awaiting the Bank of Korea’s policy decision on Friday. Fifteen of 18 economists predict the benchmark rate will be left at a record-low 1.5 percent, while three forecast a quarter-percentage-point cut. The won has fallen more than 2 percent this quarter, the worst performance after Malaysia’s ringgit, after it rallied 2.5 percent in the first three months.
The currency has declined even as overseas investors purchased a net $1.9 billion of the nation’s shares since March 31. The Kospi index has dropped 1.2 percent in the same period and was down 0.6 percent on Wednesday.
South Korea’s 10-year government bond yield was steady at 1.77 percent, according to Korea Exchange. The three-year yield was at 1.42 percent, near Monday’s all-time low of 1.41 percent.
The Bloomberg Dollar Spot Index fell 0.1 percent after a similar decline on Tuesday. Futures are showing just 4 percent odds of a U.S. rate increase by June and 17 percent by July. That compares with 8 percent and 23 percent on Friday.