After hitting five-year low, South Korean currency Won pared early losses and recovered the most in two months. Won fell 2.8 percent this year so far. This indicated bolstering demand for emerging market assets. China's gross domestic product (GDP) rose 6.8 percent in fourth quarter as against the forecast of 6.9 percent.
Earlier Won tumbled to five-year low as China missed growth forecast. The KOSPI index rose 0.6 percent in Seoul after easing 0.2 percent. South Korean currency Won fell 7.2 percent in 2015 and a further 2.8 percent in 2016 so far. Won has been the worst performer among Asian currencies.
Shanghai stocks rose 3.3 percent on news that state-owned funds were supporting local equities. The expectations on further easing monetary measures by China's central bank also aided the buying support. China is the largest overseas market for South Korea and dragon country impacts it significantly, according to Bloomberg.
Investors in South Korea during last week extended buying support to beaten-down shares on upsurge in Wall Street and Eurozone stocks. China exports rose 2.3 percent in December 2015 and imports fell four percent. Foreign investors' net selling was at Won17 billion in KOSPI shares.
South Korean Won firmed up against US dollar before falling to five-year low during the first week of 2016. Won rose tracking Yuan. China's regulator was supporting Yuan reversing the recent depreciation. This propelled Won also, according to a report published in The Economic Times.
China's gross domestic product was up 6.8 percent in fourth quarter of 2015 as against the forecast of 6.9 percent in a survey by Bloomberg. The GDP growth below expectations has dampened the confidence and outlook for South Korean exports. This had majorly impacted the Won.
South Korean Won suffered its major loss since 25 September 2015. Won fell 2.2 percent during the first week. Later it recovered following the Chinese currency Yuan. Foreign investors sold Won 254 billion ($212.1 million) in KOSPI shares, as reported by Nikkei Asian Review.
Kim Daehoon, a foreign-exchange trader of Busan Bank in Seoul: "There was dollar-selling pressure from offshore traders as Chinese stocks rose more in afternoon trades."
South Korean foreign minister Yoo Il Ho asked authorities to monitor external uncertainties, while saying that China's woes were increasing faster than expected. South Korea's 10-year government bonds dropped with yield rising to 2.07 by three basis points. The three-year yield was marginally changed at 1.65 percent, according to Korean prices.
South Korean currency Won dropped against the US dollar to five-and-a-half year low as demand for safer assets increased. The global investors preferred to buy US dollars as safe haven in the prevailing uncertainty in the forex markets. Won against the dollar fell to 1,211.5. Won fell to record low against the US dollar at 1,218 on 20 July 2010. Won closed the last week at 1,198.1 /USD.
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