Korean Won Nears 3-Month High on Signs Global Recession Easing

By Kim Kyoungwha

April 16 (Bloomberg) -- South Korea’s won strengthened, approaching a three-month high, as optimism a global recession is easing bolstered demand for emerging-market assets.

The Korean currency extended its gain for the past month to 7.5 percent and global stocks advanced after the U.S. Federal Reserve said the pace of contraction slowed in several of the nation’s biggest regional economies last month. Overseas investors bought more Korean shares than they sold today, helping lift the Kospi stock index 2.2 percent.

“The movements in the currency market are a simple reflection of stock moves these days,” said Ko Yun Jin, a currency dealer with Kookmin Bank in Seoul. “Exporters are willing to settle deals on the dollar’s highs, while there’s demand for the greenback from dividend payments.”

The won rose 1.4 percent to 1,320.10 per dollar as of 9:45 a.m. in Seoul, according to data compiled by Bloomberg. It reached 1,298.05 on April 10, the highest since Jan. 8.

Five of 12 Fed district banks “noted a moderation in the pace of decline,” the Fed said yestereday in its Beige Book business survey, published two weeks before officials meet in Washington to set monetary policy. The U.S. is South Korea’s second-largest trading partner, after China.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net;