Dec 22, 2014 2:38 AM ET
South Korea’s won strengthened amid speculation local exporters are selling dollars to repatriate overseas earnings as the year-end approaches.
The nation had a $5.6 billion trade surplus in November, a 34th month of excess, data showed on Dec. 1. The won was also supported as global stocks gained amid a rebound in oil prices. The MSCI Asia Pacific Index (MXAP) of shares headed for its steepest three-day advance since July 2013 after Brent crude oil jumped by the most in two years on Dec. 19. South Korea’s finance ministry lowered its 2015 growth forecast to 3.8 percent today from 4 percent.
The won gained 0.5 percent to 1,096.27 per dollar at the close in Seoul, according to prices compiled by Bloomberg. The currency also strengthened 0.5 percent against the Japanese yen.
“With trading volume low near year-end, exporters who actually need to sell the greenback are moving the exchange rate,” said Park Dae Bong, a Seoul-based currency trader for Nonghyup Bank. “It seems some investors are also betting on a stronger won against the yen.”
The yield on South Korea’s three-year government bonds fell two basis points, or 0.02 percentage point, to 2.17 percent in Seoul, Korea Exchange Prices show. The yield on the 2024 notes declined six basis points to 2.68 percent.
The finance ministry sold 20-year securities today at 2.89 percent, according to a statement on the government’s website. Foreign investors purchased a net 7,159 three-year debt futures contracts, the most since Oct. 29, according to data compiled by Bloomberg.
“With foreign investors buying that amount of bond futures, it’s hard to take a sell position on bonds,” said Yum Sang Hoon, a Seoul-based bond broker at Bookook Securities Co.
original source: http://www.bloomberg.com/news/2014-12-22/korean-won-gains-on-speculation-local-exporters-selling-dollars.html