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By Korea HeraldPublished : Jan. 27, 2014 - 19:48
South Korea’s won dropped to a four-month low as signs of slowing growth in China and a plunge in emerging-market assets stoked concern global funds may pull money out of the region.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, fell for the third day and the KOSPI share gauge slid to the lowest level since August. Overseas investors sold $409 million more South Korean equities than they bought this month, exchange data show. South Korea will act “swiftly and decisively” to stabilize the foreign-exchange market if needed, Vice Finance Minister Choo Kyung Ho said in Seoul yesterday.
The won declined for the sixth day, the longest run of losses since March, falling 0.4 percent to 1,084.62 per dollar as of 9:49 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,087.50, the weakest since Sept. 13, and has fallen 2.7 percent this year.
“The decline in stock markets is triggering concern that investors may withdraw from emerging markets, pulling down the won,” said Han Sung Min, a currency trader at Busan Bank in Seoul. “Since the won has fallen so much in a short time, there will be caution against government intervention.”
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose 43 basis points, or 0.43 of a percentage point, to 8 percent.
The government is not looking at foreign-exchange levels but at volatility and herd behavior, Vice Finance Minister Choo said. South Korea’s consumer confidence index rose to a three-year high of 109 in January from 107 in December, according to a central bank statement released today.
Currencies from Turkey to India sank last week and emerging-market stocks fell to a 4 1/2-month low as Argentina devalued the peso and signs Chinese manufacturing is slowing added to concern the global recovery is faltering just as the U.S. starts to taper stimulus.
China’s manufacturing may contract for the first time in six months, according to a gauge released by HSBC Holdings Plc and Markit Economics last week. The preliminary reading of 49.6 for January in the Purchasing Managers’ Index was below a final figure of 50.5 in December and all 19 estimates of analysts in a Bloomberg News survey. A number above 50 indicates expansion.
The yield on South Korea’s 3 percent government bonds due December 2016 rose one basis point to 2.87 percent, according to Korea Exchange Inc. prices. The rate for 10-year notes fell two basis points to 3.57 percent. (Bloomberg)
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, fell for the third day and the KOSPI share gauge slid to the lowest level since August. Overseas investors sold $409 million more South Korean equities than they bought this month, exchange data show. South Korea will act “swiftly and decisively” to stabilize the foreign-exchange market if needed, Vice Finance Minister Choo Kyung Ho said in Seoul yesterday.
The won declined for the sixth day, the longest run of losses since March, falling 0.4 percent to 1,084.62 per dollar as of 9:49 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,087.50, the weakest since Sept. 13, and has fallen 2.7 percent this year.
“The decline in stock markets is triggering concern that investors may withdraw from emerging markets, pulling down the won,” said Han Sung Min, a currency trader at Busan Bank in Seoul. “Since the won has fallen so much in a short time, there will be caution against government intervention.”
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose 43 basis points, or 0.43 of a percentage point, to 8 percent.
The government is not looking at foreign-exchange levels but at volatility and herd behavior, Vice Finance Minister Choo said. South Korea’s consumer confidence index rose to a three-year high of 109 in January from 107 in December, according to a central bank statement released today.
Currencies from Turkey to India sank last week and emerging-market stocks fell to a 4 1/2-month low as Argentina devalued the peso and signs Chinese manufacturing is slowing added to concern the global recovery is faltering just as the U.S. starts to taper stimulus.
China’s manufacturing may contract for the first time in six months, according to a gauge released by HSBC Holdings Plc and Markit Economics last week. The preliminary reading of 49.6 for January in the Purchasing Managers’ Index was below a final figure of 50.5 in December and all 19 estimates of analysts in a Bloomberg News survey. A number above 50 indicates expansion.
The yield on South Korea’s 3 percent government bonds due December 2016 rose one basis point to 2.87 percent, according to Korea Exchange Inc. prices. The rate for 10-year notes fell two basis points to 3.57 percent. (Bloomberg)
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Articles by Korea Herald
