Korean Exporters Spur Won in Biggest Asia Gain as Dollar Weakensby
Asia currencies rise as greenback drops before Fed officials
Govenrment may cut 2016 growth forecast, Dong-A Ilbo reports
South Korea’s won rose on speculation exporters are exchanging their dollars at a more competitive rate after the local currency weakened beyond 1,190 last week.
The won led gains across Asia on Monday as a measure tracking the greenback against 10 major peers retreated and Brent crude extended losses. A number of Federal Reserve officials speak this week and further comments in support of a U.S. rate increase as soon as next month may renew global demand for dollars. South Korea’s government may cut its 2016 economic growth forecast to below 3 percent this week, according to a report in the Dong-A Ilbo newspaper.
The won rose 0.6 percent to 1,182.90 per dollar at the close in Seoul, marking the biggest gain since April 28, prices from local banks compiled by Bloomberg show. The currency dropped to 1,193.35 on Thursday, the lowest level since mid-March. It’s down the most in the region this quarter after Malaysia’s ringgit.
“Exporters are coming into the market now," said Min Gyeong Won, an analyst at NH Futures Co. in Seoul. “The won’s bottom is firm as the dollar’s move is range-bound. There is a cautious undertone before comments this week from key Fed officials.”
The Group of Seven meeting of finance chiefs and central bank governors at the weekend showed Japanese and U.S. officials were divided on exchange-rate policies. The yen appreciated against the dollar on Monday even as data showed exports contracted because of strength in the Japanese currency. South Korean auto and electronics manufacturers compete in international markets with those in Japan, so moves in the two currencies are often closely correlated.
South Korean government bonds were little changed, with the three-year yield at 1.47 percent and the 10 year at 1.8 percent, Korea Exchange prices show.