Korean Won Gains as Geithner Comments Bolster Risk Appetite

By Bob Chen

April 22 (Bloomberg) -- South Korea’s won rose for the first time in three days after Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have enough capital, helping revive a global stocks rally and bolster demand for emerging-market assets.

Overseas investors yesterday turned net sellers of Korean shares, contributing to a drop in the won, after Bank of America Corp. set aside more money for bad loans. South Korea’s stock and currency markets are “stable” and the economy is showing both positive and negative signs, Vice Finance Minister Hur Kyung Wook said today.

“The Korea won is a touch stronger on the back of better equities in the U.S.,” said Dwyfor Evans, a Hong Kong-based strategist at State Street Global Markets. “We’ve had five weeks of very strong equity performance that’s driven the emerging-market currencies stronger, but that’s been more hit- and-miss in the last few days.”

The won climbed 0.4 percent to 1,343.70 per dollar as of 10:05 a.m. in Seoul, according to data compiled by Bloomberg. The currency has strengthened in each of the last six weeks and touched a three-month high of 1,298.05 on April 10.

The Kospi stock index climbed 0.7 percent, headed for its highest close since October. The Standard & Poor’s 500 Index of U.S. shares climbed 2.1 percent yesterday, its biggest gain in more than a week.

To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net