Output Slips In South Korea, Won Weakens
Industrial production rose at a slowed pace in the month of October, reflecting a slowdown in the country’s number one sector – exports. According to Statistics Korea, the pace of output rose by an annualized pace of 6.2% in the month, higher than market estimates of a 5.1% climb. But, the figure was lower than September’s rosier 6.9% – led lower by a month over month decline of 0.7%. The drop was reflective of weakness that was seen in the exporting and manufacturing sector – which contributes to almost half of overall economic expansion. Gains in exports were at the slowest pace in 2 years, rising by only 8% annually.
The country’s capacity rate additionally fell 1.8 percentage points to 79.5% in the month of October.
Recent industrial output figures and slower export growth reports are likely to keep the Bank of Korea on standby when it comes to any further changes in monetary policy. This is will potentially continue till the year end – especially with the European debt crisis remaning unsolved.
As a result of the pessimistic news, the USDKRW exchange rate skyrocketed higher – trading from 1,139.80 to as high as 1,146.80 shortly following the release. Since the European session open, the South Korean won has retraced, now trading at 1,140.60.