Tuesday, July 24, 2007

The Won Keeps rising

From Bloomberg:

Won Rises to Strongest This Year

By Jake Lee

July 24 (Bloomberg) -- South Korea's won rose to the strongest this year before a government report tomorrow that may show the economy grew at the fastest pace in 1 1/2 years.

The won has risen 1.1 percent this month as the Kospi index advanced to a record and the central bank and government raised their growth forecasts. The Bank of Korea may allow the won to appreciate faster as a 2.4 percent rally in Japan's currency against the dollar this month eased concern exporters will lose competitiveness.

``We're bullish on the won and think it can keep getting stronger,'' said Catherine Tan, head of emerging markets at Forecast Singapore Ltd. ``The economy is doing well and the market is now looking at the growth report tomorrow.''

The won rose as much as 0.1 percent to 913.90 against the dollar, the strongest since Dec. 7, before closing at 914.10 at 3 p.m., according to Seoul Money Brokerage Services Ltd. It may rise to 910 by year-end, Tan said. The won has risen 1.7 percent this year against the dollar and 3.1 percent versus the yen.

The currency has ``gained a lot,'' Vice Finance Minister Kim Seok Dong said July 19, adding that the share market had risen at a ``drastic'' pace. A stronger won may hurt exports, which account for 40 percent of the economy, by making Korean goods more expensive compared with those of regional rivals.

Asia's third-largest economy expanded 1.3 percent from the first quarter, according to the median estimate of 11 economists surveyed by Bloomberg News. The gross domestic product report will be released at 8 a.m. in Seoul tomorrow.

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