Bloomberg News

Won Reverses Loss on Speculation Exporters Selling Dollars

November 17, 2011

Nov. 17 (Bloomberg) -- South Korea’s won reversed earlier losses as the benchmark share index rose and on speculation exporters are selling dollars to convert income. Government bonds declined.

The won strengthened 0.4 percent to 1,131.74 per dollar as of 2:17 p.m. in Seoul, according to data compiled by Bloomberg. It touched 1,144.40 earlier, the weakest level since Oct. 24. The Kospi Index of shares gained 0.6 percent, after falling as much as 1.1 percent.

“Market sentiment improved as the Kospi gained, prompting investors to stop their long positions on the dollar,” said Yun Se min, a Seoul-based currency dealer with Busan Bank. “Exporters selling dollars to convert income also supported won gains.” A long position is a bet that an asset will rise.

The won fell as much as 0.7 percent after Fitch Ratings said Europe’s debt crisis poses a “serious risk” to U.S. banks, prompting investors to favor safer bets than emerging-market assets. Sales at South Korea’s major department stores rose 3.1 percent in October, the smallest gain in 30 months, the Ministry of Knowledge Economy said today.

The nation’s consumer prices are stabilizing after price gains in agricultural and dairy products slowed, Newspim reported, citing Finance Minister Bahk Jae Wan at a government meeting today.

The government’s benchmark three-year bonds snapped a two- day advance. The yield on South Korea’s 3.5 percent debt due June 2014 rose six basis points, or 0.06 percentage point, to 3.39 percent, Korea Exchange Inc. prices show. Yesterday’s closing level was the lowest in two months.

--Editors: Andrew Janes, Sandy Hendry

To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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