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(Seoul=Yonhap Infomax) Sun Young Jung – FX swap points climbed in South Korea's foreign exchange funding market on November 24, reflecting diverging interest rate expectations between the United States and South Korea ahead of key central bank meetings in December.
On the day, the one-year FX swap point was quoted at -21.00 won, up 0.30 won from the opening level of -21.30 won. The six-month tenor rose 0.10 won to -12.50 won, while the three-month contract edged up 0.05 won to -6.70 won. The one-month swap point remained unchanged at -2.15 won.
In the ultra-short-term segment, the overnight swap point was at -0.19 won, and the tomorrow-and-next (T/N) stood at -0.065 won.
Market participants are closely watching the upcoming December meetings of the U.S. Federal Open Market Committee (FOMC) and the Bank of Korea's Monetary Policy Board, as expectations for policy rates in the two countries diverge.
“U.S. rates are trending lower while Korean rates are rising, which has led to a slight increase in longer-dated FX swap points,” said a swap dealer at a major commercial bank. “The ultra-short-term segment was heavy, likely due to some outflows of funds.”
syjung@yna.co.kr
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