South Korea Won Leads Asia Slide as Focus Turns to Yellen Speechby
South Korea’s won led a drop in Asian currencies ahead of a speech next week by Federal Reserve Chair Janet Yellen, which may yield clues on when U.S. interest rates will rise.
The won sank to a three-week low on Friday, after rallying 1 percent at the start of the week when a surge in energy prices boosted demand for higher-yielding assets. Minutes published Wednesday from the Federal Open Market Committee’s July meeting showed officials were split over the urgency of raising borrowing costs. Yellen will speak at the Kansas City Fed’s annual Monetary Policy Symposium in Jackson Hole, Wyoming on Aug. 26.
“The Korean won was the best performer in previous weeks, so it’s just more of a correction,” said Roy Teo, a senior currency strategist at ABN Amro Bank NV in Singapore. “There’s some uncertainty with regards to what Janet Yellen might be saying next Friday. So it’s just more of profit-taking.”
The won slid 0.9 percent to 1,117.55 per dollar in Seoul, taking its drop this week to 1.3 percent, according to prices from local banks compiled by Bloomberg. It earlier declined to 1,120.65, the lowest since July 29.
Ten-year government bonds were little changed, with the yield at 1.42 percent.