The South Korea’s won advanced after exporters repatriated their offshore profits while the central bank announced the second-biggest current-account surplus this year.
The won rose 0.2 percent to trade at 1,024.50 per dollar at Seoul close. The currency’s one-month implied volatility, a measure of anticipated shifts in the exchange rate used to assign price to options, plunged 0.12 percentage point or 12 basis points, to 5.63 percent.
“We’re seeing exporters sell large amounts of dollars before the summer holiday season starts in August,” Jude Noh, a Seoul-based chief currency trader for Suhyup Bank, told Bloomberg. “The current-account surplus and Kospi extending gains are also supporting sentiment toward the won.”
The current-account surplus stood at $7.92 billion in June, according to official data. The won also got boosted by foreign investors who purchased net local equities for the 11th straight day. The Kospi Index ended Tuesday’s trade at its highest level in three years after global funds increased their local stock portfolio by $3 billion this month.
Addressing reporters after publishing the current-account statistics, the Bank of Korea director-general Jung Yung Taek said that he expects imports and exports in July to expand from a year ago. Analysts in a Bloomberg survey project exports to have increased 3.8 percent in July, while imports rose 1.5 percent. Official figures are due on August 1.
The yield on South Korea government bonds that mature on June 2017 increased two basis points to steady at 2.53 percent, according to Korea Exchange data. The yield on the notes that mature on March 2024 increased three basis points to 3.04 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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