Latest news with #SouthKoreanWon
Yahoo
27-05-2025
- Business
- Yahoo
Hedge Funds Bet on Korean Won to Mirror Taiwan Dollar's Surge
(Bloomberg) -- Hedge funds are ramping up bets in the options market that the South Korean won will mirror the Taiwan dollar's recent rally against the greenback. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Dollar-won option trading volume spiked to this year's high last week, according to the Depository Trust & Clearing Corporation data, as speculation grew that Korea and the US discussed the won's direction in their currency talks. Barclays Bank Plc said there's been increased demand for put options from hedge funds. A surge in the Taiwanese dollar this month has reshaped market expectations for Asian currencies. Investors see the won as a likely candidate for comparable gains, as Korea's trade surplus with the US adds pressure on local authorities to tolerate a stronger currency. The US last year added Korea to its foreign-exchange monitoring list — which already included Taiwan. A key question 'most hedge funds have been asking is: which currency pair can have the same magnitude of move that was observed in' the Taiwan dollar, said Mukund Daga, head of foreign-exchange options for Asia at Barclays in Singapore. 'This has led to decent demand for dollar-won put options in digital and vanilla formats by fast-money names.' Vanilla options are standard contracts with no special features attached to them, while digital trades offer a fixed payout if the FX pair hits a preset level at expiration. Demand for dollar-won put options with notional sizes over $60 million outpaced call options on DTCC by a 3:2 ratio on Wednesday, underscoring the bias for bearish bets on the pair. The premium to hedge dollar-won downside over the next month compare to the upside, as measured by risk reversals, traded near a 21-year high last week. The dollar-won pair 'was already seeing active downside interest for digitals and put spreads since the big move in the Taiwan dollar a few weeks back,' said Saurabh Tandon, global head of foreign-exchange options at Standard Chartered Bank in Singapore. 'The recent FX related comments have spurred on interest in downside dollar-won trades.' The tariff talks between the US and its trading partners have raised speculation that President Donald Trump's administration is open to a weaker greenback. For many, the won is becoming a favored proxy for broader shifts in US-Asia trade dynamics and a key hedge against declining dollar strength. The won rallied last week as local media cited an unnamed government official as saying that the US believes a relatively weak local currency is a fundamental cause of Korea's trade surplus. The finance ministry has said that while FX talks with the US are ongoing, nothing has been decided yet. The Taiwan dollar's 7% surge this month has raised hedging costs for Taiwanese insurers, who are large holders of US-dollar assets. That's making the won a major proxy for hedging, according to a Bank of America note dated May 21. The 'market is showing insatiable appetite for owning optionality in the won,' said Ivan Stamenovic, head of Asia Pacific G-10 FX trading at Bank of America Corp. 'We are seeing major interest across the term structure indiscriminate of tenors. --With assistance from Jaehyun Eom and Betty Hou. Why Apple Still Hasn't Cracked AI Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? How Coach Handbags Became a Gen Z Status Symbol Inside the First Stargate AI Data Center AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox ©2025 Bloomberg L.P.
Bloomberg
27-05-2025
- Business
- Bloomberg
Hedge Funds Bet on Korean Won to Mirror Taiwan Dollar's Surge
Hedge funds are ramping up bets in the options market that the South Korean won will mirror the Taiwan dollar's recent rally against the greenback. Dollar-won option trading volume spiked to this year's high last week, according to the Depository Trust & Clearing Corporation data, as speculation grew that Korea and the US discussed the won's direction in their currency talks. Barclays Bank Plc said there's been increased demand for put options from hedge funds.
Bloomberg
26-05-2025
- Business
- Bloomberg
Won May Extend Rally on Easing Political Risks, Trade Deal Bets
The South Korean won is attracting a growing number of bullish calls from analysts, who expect the country's trade negotiations with the US and easing political uncertainties to extend a recent rally. The currency may strengthen to as high as 1,320 per dollar by the end of the year, according to BofA Securities. That suggests the potential for over 3% advance following last week's 2.6% rally, which was the best in Asia. iM Securities Co. in Seoul forecasts a move toward 1,350.
Bloomberg
22-05-2025
- Business
- Bloomberg
Won Touches Seven-Month High on Report of Currency Talks With US
The South Korean won climbed to a seven-month high late Wednesday after local media reported the direction of the currency was discussed during trade talks with the US. The currency rallied after Korea Economic Daily cited an unnamed government official as saying the US believes a relatively weak won is a fundamental cause of the Asian nation's trade surplus. The talks are ongoing and nothing has been decided yet, Korea's finance ministry said in a statement.
Zawya
15-05-2025
- Business
- Zawya
Dollar slips ahead of retail sales data as China-US trade optimism wanes
The U.S. dollar lost its footing against major peers on Thursday ahead of retail sales data that could offer clarity on how U.S. consumers fared in the face of tariff risks, while excitement over a China-US trade deal faded. The greenback has given up most of its gains from Monday after the United States and China announced a 90-day pause on most of the tariffs imposed on each other's goods since early April, easing fears of a global recession. "Markets have exhausted the positivity from the U.S.-China trade talk," said Benjamin Ford, strategist at Macro Hive in London. Safe-haven currencies gained with the Japanese yen strengthening 0.6% to 145.94 per dollar after having touched a one-month low of 148.65 this week. The Swiss franc firmed 0.5% to 0.8384 versus the dollar. The euro tacked on 0.2% to $1.1192. Most Asian currencies advanced versus the dollar too, led by a surge in the South Korean won for the second day after news that officials from South Korea and the U.S. met last week to discuss the dollar/won exchange rate led to a bout of dollar selling. The won surged 0.8% at 1,396.15 per dollar. The sudden lift in the won was reminiscent of an unprecedented two-day surge in Taiwan's currency at the start of May, which also coincided with the end of U.S.-Taiwan trade talks in Washington. The Taiwan dollar was 0.6% stronger to the dollar on Thursday. A Bloomberg report on Wednesday, however, said the U.S. is not negotiating for a weaker dollar as part of tariff talks, which has helped calm some nervousness in markets. The dollar index, which measures the U.S. unit against six other currencies, dipped 0.1% to 100.85, but on course to eke out a 0.4% gain for the week. Even so, the index is down nearly 7% in 2025. SHARP FALL U.S. President Donald Trump's aggressive and erratic trade policies have rattled investors' confidence in the dollar, leading to a sharp fall in U.S. assets. Although stock markets have recouped April losses, the dollar remains under pressure. "We've seen U.S. equities stabilize, but we haven't seen those inflows return (to the dollar). Some clients have lightened their dollar shorts but they're not looking to turn long in any single fashion," Ford said. Amundi Investment Institute turned cautious on the U.S. dollar in May versus a month ago, as it believes a rotation out of the U.S. will continue benefiting regions such as Europe, Emerging Markets, and Asia, strategists said in a note. A major market focus on Thursday will be U.S. retail sales data, and investors are also looking out for more details on possible trade deals after the U.S.-China tariff truce. "Hard data on US personal consumption have so far shown resilience despite weakness in consumer sentiment," said UniCredit investment strategist Thomas Strobel in a note, adding that U.S. data later in the day will test whether this resilience continued after sweeping U.S. tariffs last month. U.S. Treasury yields were elevated and the benchmark 10-year yield hovered near a one-month top, in part due to worries over Trump's budget package that would add trillions of dollars to the U.S. debt. Sterling firmed 0.2% to $1.328 against the U.S. dollar after data showed the UK economy unexpectedly grew in March. (Reporting by Ankur Banerjee in Tokyo and Medha Singh in Bengaluru; Editing by Edwina Gibbs, Ros Russell and Ed Osmond)
