USD/KRW edges higher on concerns South Korean exporters are losing competitiveness against Japanese rivals

The South Korean won ontinued its downward trend, after having touched a two-week low on Wednesday on concerns that South Korean exporters were losing competitiveness against Japanese rivals as the yen drops. Government bonds also fell.

USD/KRW reached a session high at 1 064.80 during late Asian trade, which is slightly lower than yesterdays two-week high of 1 065.45. Support was to be received at November 27th low, 1 060.00, while resistance was to be encountered at November 27th high, 1 065.45.

Yesterday, Bank of Korea announced that a weaker yen may hurt the profitability of some exports. The South Korean won advanced 7.6 percent against the US dollar since the end of June, which is the most in Asia.

South Korea, the fourth largest Asian economy, slowed its exports to 3% in November, compared to 7.2% in October, according to the median forecast of economists surveyed before data due out on December 1st. Export accounts for about 50% of South Koreas economy.

Chung Soon Won, Bank of Korea board member, told on Thursday in an interview in Seoul, cited by Bloomberg that South Koreans economy was improving.

Meanwhile, the US dollar gained appeal yesterday after a report by Thomson Reuters and the University of Michigan revealed that the final reading of the gauge of consumer sentiment in the United States climbed to 75.1 in November from a final value of 73.2 in October. Expectations pointed an increase to 73.1 in November compared to the preliminary reading of 72.0, published on November 8th, which was also the lowest point since December 2011.

Additionally, also yesterday the Department of Labor reported that the number of initial jobless claims in the US, an indicator for lay-offs in companies, dropped by 10 000 to reach 316 000 during the week ending on November 23rd 2013, confounding preliminary estimates pointing that claims will climb to 330 000. The number of claims in the preceding week has been revised up to 326 000 from 323 000 previously.

Today trading volumes are expected to remain light, as markets in the United States are closed for Thanksgiving holiday.

Elsewhere, NZD/USD touched a session high at 0.8178 at 5:05 GMT, after which consolidation followed at 0.8154, gaining 0.07% for the day. Support was likely to be found at November 27th low, 0.8116, while resistance was to be encountered at November 27th high, 0.8212. Having touched a six-month high at 102.28 during the early phase of Asian trade, USD/JPY was trading little changed at 102.15 at 7:36 GMT, dipping a mere 0.01% for the day.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News