The won was headed for its best weekly gain since December 2011 on speculation South Korean authorities won’t act to curb its gain as the yen rebounded from near a three-year low before a Group of 20 nations meeting.
The currency rose to the highest level this month after the Bank of Korea held its benchmark interest rate at 2.75 percent for a fourth month yesterday. G-20 leaders gathering in Moscow from today will reaffirm a pledge to avoid competitive devaluation, according to a draft statement obtained by Bloomberg News, while Russia pushed for a stronger stance against exchange-rate manipulation. The yen rebounded after breaching 94 per dollar on Feb. 11 even as a report showed Japan’s economy shrank last quarter.
“We are unlikely to see any strong action from Korea or other Asian central banks before the G-20 meeting,” said Roy Teo, a currency strategist at ABN Amro Bank NV in Singapore. “The impact of yen weakness on Asian economies is likely to be relatively muted” because of the rise of China as the top market for Asian exports, he said.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.