South Korea’s won rose to a 16-week high and government bonds declined after exports increased in February at the fastest pace in six months.
Overseas sales climbed 22.7 percent from a year earlier, after declining in January, and the trade balance swung to a $2.2 billion surplus from a deficit, a report showed yesterday. Inflation slowed to a 14-month low of 3.1 percent, according to a separate report today. Overseas investors bought $3.9 billion more Korean shares than they sold last month.
“South Korea’s trade surplus and cooling inflation, despite oil-price spikes, are supporting investor sentiment,” said Kim Doo Hyun, a Seoul-based senior currency dealer at Korea Exchange Bank. (004940) “The figures also signal that previous factors which contributed to a weakening of the won have eased.”
The won gained 0.3 percent from its Feb. 29 close to 1,115.61 per dollar in Seoul, according to data compiled by Bloomberg. Local financial markets were closed yesterday for a holiday. The currency strengthened 0.9 percent this week and touched 1,112.05 today, the strongest since Nov. 9.
The yield on South Korea’s 3.25 percent debt due December 2014 climbed five basis points, or 0.05 percentage point, 3.49 percent today, Korea Exchange Inc. prices show. It rose four basis points this week. Three-year bond futures declined 0.08 percent this week to 104.14 and the one-year interest-rate swap advanced three basis points to 3.53 percent.
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