South Korea’s Won Rebounds as Exporters Sell Dollars to Pay Bills

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South Korea’s Won Rebounds as Exporters Sell Dollars to Pay BillsThe won surged on bets that South Korean exporters offloaded their dollar reserves to pay up their month-end obligations.

The won grew 0.2 percent to 1,018.53 per dollar at the close of trading in Seoul. The currency has rallied at least 13 percent over the past 12 months, and hit 1,015.25 on June 10, its strongest level since August 2008. Last week, the currency fell to its lowest level in two months after foreign investors offloaded net local stocks.

“The market is likely to receive quite a bit of dollar supplies as the month end approaches,” Jahng Won, a currency trader at Shinhan Bank in Seoul told Bloomberg. “Further strength in the won is likely to be limited as traders remain cautious about intervention.”

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The won’s one-month implied volatility, which measures the expected shifts in the exchange rate used to assign prices to options, accelerated 0.11 percentage point, or 11 basis points, to 4.84 percent. The yield on 10-year bonds rose 1 basis point to 3.23 percent while that of 2.75 percent bonds that mature in June 2017 rallied two basis points to 2.69 percent.

India’s rupee declined to the lowest level in seven weeks over fears that the rising crude oil prices may negatively impact on the country’s trade shortfall and trigger inflation.

The rupee remained slightly unchanged on Monday at 60.2075 per dollar in Bombay, up from the day’s low of 60.2775. The currency had earlier touched 60.5400 on June 18, its lowest mark since April 29. Last week, the Brent crude rallied to $115.71 per barrel, the most since September over concerns that the ongoing Iraqi violence may affect oil supplies. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com