June 8 (Bloomberg) -- South Korea’s won gained, approaching a one-month high, after Federal Reserve officials signaled they will keep policies to support economic growth.
The dollar fell against most of its major counterparts yesterday after Federal Reserve Chairman Ben S. Bernanke said record monetary stimulus is still needed to boost a “frustratingly slow” recovery. The won exchange rate is determined by economic fundamentals and the government hasn’t tried to artificially weaken the currency, Finance Minister Bahk Jae Wan said in parliament in Seoul yesterday.
“Bernanke’s comments suggest that the U.S. economy is sluggish, damping demand for the dollar and boosting appetite for riskier assets,” said Han Sung Min, currency dealer at Busan Bank in Seoul. “Concerns that South Korean authorities may step in, in case the won gains are rapid, are weighing on the won.”
The won rose 0.2 percent to 1,080.10 per dollar as of the close of trade in Seoul, according to data compiled by Bloomberg. The currency reached a one-month high of 1,074.30 on June 1.
The nation’s economic growth is in line with expectations, Bank of Korea Director Jung Yung Taek said. The bank said today that the economy expanded 1.3 percent in the three months through March from the previous quarter, less than the April estimate of a 1.4 percent gain. Gross domestic product grew 4.2 percent from a year earlier, unchanged from the earlier estimate.
Five-year government bonds dropped, with the yield on the notes due March 2016 rising one basis point, or 0.01 percentage point, to 3.8 percent, according to prices from Korea Exchange Inc.
--With assistance from Sandy Hendry in Hong Kong. Editors: Sandy Hendry, James Regan
To contact the reporter on this story: Seyoon Kim in Seoul at email@example.com
To contact the editor responsible for this story: Sandy Hendry at firstname.lastname@example.org