South Korea’s won rebounded from a seven-month low as concern eased that Greece will exit the euro. Government bonds were little changed.
Greek opinion polls showed stronger backing for parties that support the European Union’s bailout agreement. Greece’s New Democracy placed first in all six opinion polls published on May 26 as campaigning continued for the general election on June 17. The Kospi Index (KOSPI) rose to a two-week high as overseas investors bought more of the nation’s stocks than they sold today for the first time this month. South Korean financial markets were closed yesterday for a holiday.
The won strengthened 0.9 percent from May 25 to 1,174.82 per dollar at today’s close in Seoul, according to data compiled by Bloomberg. The currency fell 1.1 percent last week and touched 1,185.53 on May 25, the weakest level since Oct. 6.
“Concerns surrounding Greece eased with opinion poll results released, and South Korean exporters were selling the dollar to convert income as the end of the month nears,” said Lee Jin Ill, a Seoul-based currency trader at Hana Bank.
The currency’s one-month implied volatility, a measure of exchange-rate swings used to price options, slid ten basis points, or 0.10 percentage point, to 11.48 percent.
South Korean manufacturers’ confidence for June fell to 86 from a nine-month high of 90 in May, the Bank of Korea said in a statement today.
Franklin Templeton Investments, the biggest overseas owner of South Korean bonds, remains “positive” on the country, betting the manufacturing industry will hold up as the currency weakens, Kim Dong Il, chief investment officer for fixed income at its Seoul unit, said in an interview on May 24.
The yield on South Korea’s 3.25 percent bonds due December 2014 was steady at 3.36 percent, Korea Exchange Inc. prices show. Three-year debt futures dropped 0.03 to 104.52 and the one-year interest-rate swap rose two basis points to 3.37 percent.
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