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Korean Won Reverses Drop on Speculation Exporters Sold Dollars

South Korea’s won reversed an earlier drop on speculation exporters sold dollars to pay bills.

The currency closed stronger even after official data released Sunday showed overseas sales fell 15.8 percent in October from a year earlier, the most since August 2009. That was worse than the median projection for an 14.5 percent decline in a Bloomberg survey. The Bank of Korea reported Monday that September’s current-account surplus was the biggest in four months, as the net oil-importing country benefited from crude prices that are near a six-year low.

The won strengthened 0.3 percent to close at 1,136.95 a dollar in Seoul, data compiled by Bloomberg show. The currency declined as much as 0.2 percent to 1,143.22 earlier after falling 1.4 percent last week.

 

"Exporters have been waiting for the timing to sell dollars and they thought the 1,140 level is the best they can take for now," said Kim Dae Hun, a foreign-exchange trader at Busan Bank in Seoul. The settlement of month-end bills has lagged to the beginning of November, which should support the won in the short term, he said.

The current-account surplus increased to $10.6 billion in September from $8.4 billion in August.

Authorities in Beijing plan to allow direct trading between the yuan and the won on the China Foreign Exchange Trade System in Shanghai “at an early date,” South Korea’s Finance Ministry said in statement Sunday. That follows the start of direct trading of the currencies in Seoul last December.

Government bonds were steady, with the yield on the 10-year notes at 2.11 percent and the three-year yield at 1.66 percent, Korea Exchange prices show.

original source: http://www.bloomberg.com/news/articles/2015-11-02/won-trades-near-two-week-low-as-exports-tumble-most-in-six-years

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