Oct. 14 (Bloomberg) -- South Korea’s won completed its biggest weekly advance since April as Asia’s fourth-largest economy and the U.S. agreed to cooperate on currency stabilization.
President Lee Myung Bak and U.S. President Barack Obama agreed to seek ways to stabilize the currency when needed, the South Korean presidential office said in a statement today. The currency snapped a five-week slide after exchange data showed global funds bought $549 million more shares than they sold in the three days ended Oct. 13. The MSCI Asia-Pacific Index of shares fell after Standard & Poor’s cut Spain’s ratings by one level to AA-, citing a likely deterioration of the nation’s bank assets.
“The Spain downgrade dealt a blow to sentiment,” said Nam Kyung Tae, a Seoul-based currency dealer at state-run Industrial Bank of Korea. The won was supported “by news of currency- stabilization cooperation with the U.S,” he said.
The won strengthened 1.9 percent this week, the most since the five-day period ended April 1, to 1,156.13 per dollar in Seoul, according to data compiled by Bloomberg. The currency was little changed today.
The won will drop 1.8 percent against dollar during the current quarter and climb 7.1 percent in the first three months of next year, according to Standard Chartered Plc, the most- accurate forecaster for the region.
The yield on the government’s 3.5 percent bonds due September 2016 fell two basis points today and six basis points this week to 3.51 percent, according to prices from Korea Exchange Inc.
--Editors: Ven Ram, Sandy Hendry
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