Korean Won Falls to a Two-Year Low Before GDP Report
(Bloomberg) -- South Korea’s won fell through a key level of support to the lowest in two years amid a rally in the dollar and concern this week’s economic-growth data will disappoint.
The won slid as much as 0.7 percent to 1,150.05 per dollar, breaching a support line from a low of 1,145.75 set in October. The won was also sold along with other Asian emerging-market assets as worse-than-expected Australian inflation numbers sapped risk appetite.
“Concern about Korea’s economic fundamentals ahead of the release of GDP data is weighing on the won,” said Min Gyeong-won, an economist at Woori Bank in Seoul. Projections for the Reserve Bank of Australia to cut interest rates isn’t helping either, while trading volumes were low enough during local lunch hours to exaggerate the move, he said.
The won may also have declined due to some short-covering of the dollar by foreign banks, said a trader who asked not to be identified because they are not authorized to speak publicly. Korea’s currency has now dropped 2.9 percent this year, Asia’s worst performer over the period.
Korea’s economic growth slowed to 0.3 percent last quarter, from 1 percent in the previous three months, according to a Bloomberg survey before the preliminary data is published Thursday. Bank of Korea cut its growth and inflation forecasts last week and said monetary policy would remain accommodative.
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