Won Rises as South Korean Exporters Sell Dollars Around 1,180by
Currency halts two-day loss with RBA minutes lending support
Fed April minutes watched for rate path: Shinhan Investment
South Korea’s won rose on speculation exporters took advantage of a two-day drop in the currency to exchange their dollars at a more competitive rate.
The won extended losses beyond 1,180 against the greenback in early trading, after breaching that level on Monday for the first time in two months. It subsequently rebounded to gain 0.5 percent to 1,173.75 as of the 3 p.m. close in Seoul, according to prices from local banks compiled by Bloomberg.
Tuesday’s gain in the won, the biggest in more than two weeks, was also supported by minutes from the May meeting of Australia’s central bank, said Jeon Seung Ji, a foreign-exchange analyst at Samsung Futures Inc. The Aussie jumped the most in more than a month after the minutes showed policy makers considered leaving rates unchanged before opting for a cut. Asian currencies also strengthened as commodities advanced, contributing to dollar weakness.
"Exporters’ dollar sales rose as the won neared 1,180,” said Seoul-based Jeon. “We are also seeing the market moving in line with strength in the Australian dollar.”
There was a cautious tone to trading on Tuesday ahead of the release of minutes from the Federal Reserve’s April meeting later this week, which may give further clues as to when policy makers are likely to raise rates again, said Sun Sung In, an economist at Shinhan Investment Corp. in Seoul. South Korea’s central bank kept its benchmark unchanged at a record low of 1.5 percent last week.
South Korea’s Kospi index of shares closed little changed. The three-year government bond yield rose 2 basis points to 1.46 percent, while the 10-year yield rose 2 basis points to 1.79 percent, Korea Exchange prices show.