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Jan. 26 (Bloomberg) -- South Korea’s won climbed to its strongest level in more than two months after the Federal Reserve’s forecast that it will keep interest rates low until late 2014 weakened the dollar.
Chairman Ben S. Bernanke said the Fed is considering additional asset purchases to boost growth yesterday after a Federal Open Market Committee meeting in Washington. Government bonds were little changed after a central bank report showed Korea’s economy expanded 0.4 percent in the final three months of 2011 from the third quarter, slower than the 0.5 percent median estimate of 10 economists surveyed by Bloomberg News.
“The global weakness of the dollar gave an early boost to Asian currencies including the won,” said Kim Sung Soon, chief currency dealer at state-run Industrial Bank of Korea. “Risk-on sentiment continues as people didn’t read too much from the announcement of an economic slowdown in Korea. Growth isn’t slowing enough to shake confidence.”
The won advanced 0.4 percent to close at 1,121.82 per dollar in Seoul, according to data compiled by Bloomberg. It strengthened to 1,120.43, the highest level since Nov. 14. Global funds bought more local shares than they sold for an 11th straight day, according to exchange data.
From a year earlier, the economy grew 3.4 percent, after a 3.5 percent gain in the third quarter, today’s report showed.
The yield on the government’s 3.5 percent bonds due September 2016 held steady at 3.53 percent, Korea Exchange Inc. prices show.
--With assistance from Lilian Karunungan in Singapore. Editors: James Regan, Sandy Hendry
To contact the reporter on this story: Kyoungwha Kim in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: Sandy Hendry at email@example.com