Volatility in the won dropped for a third day amid concern South Korean authorities will intervene to limit the currency’s appreciation.
Steps including direct policy measures should be considered to ease exchange-rate fluctuations that affect the real economy, Finance Minister Hyun Oh Seok said May 19. Global funds have bought $4.3 billion more local equities than they sold this quarter, helping make the won the best performer among 31 major currencies tracked by Bloomberg. The nation’s trade surplus was $61 million for the May 1-20 period, customs data show.
“The won is facing appreciation pressure as exporters sell dollars near the month-end,” said Park Daebong, a Seoul-based currency trader for Nonghyup Bank. “Still, it’s hard to hold a short dollar position due to intervention concerns. There’s been little trading momentum recently.” A short position is a bet an asset will decline in value.
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