Won Falls as U.S. Housing Data Boost Dollar, Stocks Retreatby
Won near 1,130 is seen ‘burdensome’ by investors, Samsung says
South Korean bonds were steady with 10-year yield at 1.42%
South Korea’s won fell the most in two weeks amid strength in the dollar after U.S. housing data beat estimates and global stocks extended their retreat.
The International Monetary Fund cut its forecast for world growth on Tuesday, with the U.K. one of the hardest hit on concern about the contagion from Britain’s vote to exit the European Union. While China, South Korea’s biggest overseas market, was upgraded slightly by the IMF, gains in the won over the past month have made it the best in Asia, putting exports at risk. Shipments in the Asian country have contracted for 18 straight months.
The currency dropped 0.4 percent to per 1,140.45 dollar as of the 3 p.m. close in Seoul, its biggest decline since July 8, according to prices from local banks compiled by Bloomberg. It climbed to 1,130.45 on July 15, the strongest since April 20, and has appreciated 1.8 percent over the past month.
The Bloomberg Dollar Spot Index was little changed on Wednesday after posting its biggest gain in two weeks in the previous session. The Kospi index of shares fell 0.1 percent, falling for a second day.
“The market is reflecting pro-dollar sentiment today after U.S. data showed strength,” said Jeon Seung Ji, a currency analyst at Samsung Futures Inc. in Seoul. The won’s level near 1,130 was seen as “burdensome” for investors, Jeon said.
South Korea’s bonds were little changed. The three-year yield was at 1.22 percent and the 10-year yield was steady at 1.42 percent, the exchange prices show.