South Korean foreign-exchange authorities carried out a rare dollar-selling intervention on Thursday, according to market sources cited by BlockBeats, a move that pushed the won to its strongest level in nine months.
The reported action came alongside Japan’s intervention in New York trading on Thursday, where authorities bought yen and sold dollars. That operation helped pull the yen back from a 40-year low, and the overlap in timing led traders to suspect the two countries may have acted together in the currency market.
Won posts sharp rebound
The won strengthened 2% against the dollar on Thursday to 1,418.0 per dollar, its strongest level since Oct. 20 last year.
The currency had touched 1,561.50 last month, its weakest level in 17 years. It has since gained more than 8% this month and is on track for its biggest monthly advance since March 2009.
Seoul does not confirm intervention
A foreign-exchange official at South Korea’s finance ministry declined to confirm that an intervention had taken place.
One South Korean FX trader said the market suspected coordinated intervention by South Korea and Japan because officials in both countries had previously said they would stay in close contact.
Officials had flagged close communication earlier in July
On July 2, South Korea’s vice finance minister said at a press conference that Seoul was maintaining close communication on foreign-exchange matters with Japan and other major allies.
Japan’s top foreign-exchange official followed on July 7, saying Tokyo was in close communication with Seoul’s FX authorities because the two countries’ financial markets can at times show similar swings.