The South Korean won is looking to extend its gains on Thursday as economic data keeps beating market forecasts. The won, which had weakened due to reports of North Korean leader Kim Jong-unâs deteriorating health, is set for a considerable gain in April â and analysts say its best days are ahead as Seoul weathers the storm.
According to Statistics Korea, industrial production advanced 4.6% in March, up from the 3.8% contraction in February. This reading beats the median estimate of -1.3%, brings the annualized rate to 7.1%, and makes it the best performance since February 2009. Increases in display panels and automobiles elevated the numbers.
Manufacturing output also rose by a better-than-expected 4.6% last month as analysts had called for a 2% drop.
Year-on-year construction output edged up 1.5% in March, down from 5.3% in February. Construction activity was driven by a 13.1% boost in civil engineering, which was slightly offset by the 2.9% slump in building construction.
Retail sales dipped 1% in March, but the data improved from the 6% slide in February. However, the 12-month retail sales rate plunged to -8% last month, down from -2.4% in the previous month.
Earlier this week, the Bank of Korea reported a 1.4% contraction in the first-quarter gross domestic product (GDP), coming in better than the -1.5% projection. The central bankâs consumer confidence index fell to 70.8 in April, and the business confidence reading slumped to 52.
Next on the data front will be trade, inflation, and purchasing managersâ index (PMI) estimates. Vice Finance Minister Kim Yong-beom recently warned that the nationâs monthly trade balance could swing to a deficit in April for the first time since 2012.
Outside of economics, South Korea continues to contend with the coronavirus as it has nearly 11,000 confirmed cases, though most infected patients have recovered. The country also waits for confirmation on the health status of Kim Jong-un, but Seoul says there have not been any unusual signs over his health, adding that he might be in hiding due to concerns over COVID-19.
The three-year Korean treasury bond yield declined by 1.6 basis points to 1.018%, and the benchmark 10-year yield shed 3.3 basis points to 1.530%.
The USD/KRW currency pair rose 0.11% to 1,212.39, from an opening of 1,210.80, at 16:06 GMT on Thursday. The EUR/KRW climbed 0.65% to 1,325.48, from an opening of 1,307.14.
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