Korean Won Strengthens, Paring Weekly Loss as U.S. Jobless Claims Decline
South Korea’s won rose for the first time in seven days after a report showed jobless claims in the U.S. fell to the lowest level since May 2008, brightening the outlook for exports to the world’s biggest economy.
Currencies declined and benchmark stock indexes fell across Asia’s emerging markets this week on concern Europe’s debt crisis will escalate. Christine Lagarde, the managing director of the International Monetary Fund, said yesterday the crisis is growing to the point that it won’t be solved by one group of countries. Moody’s Investors Service said a European summit held last week offered few new measures and doesn’t diminish the risk of credit-rating cuts for European nations. South Korea’s government bonds retreated.
“The U.S. data supported some risk-taking sentiment today, but we’re still walking on thin ice as bad news from Europe may come out anytime,” said Lee Jung Hyun, a Seoul-based currency dealer at the Industrial Bank of Korea. “Currency markets are quiet as year-end nears, and the low trading volume is helping prevent volatility.”
The won gained 0.4 percent to close at 1,158.73 per dollar in Seoul, trimming this week’s loss to 1 percent, according to data compiled by Bloomberg. The Kospi (KOSPI) index of shares advanced 1.2 percent, reducing its weekly slide to 1.9 percent.
The number of applications for unemployment payments in the U.S. dropped by 19,000 to 366,000 in the week ended Dec. 10, a lower total than was forecast by any of 47 economists surveyed by Bloomberg News, according to government figures released yesterday. Sales at major South Korean department stores fell 0.5 percent last month from a year earlier, the first contraction since February 2009, data showed yesterday.
The yield on South Korea’s 3.5 percent bonds due September 2016 climbed one basis point, or 0.01 percentage point, to 3.48 percent, according to Korea Exchange Inc. prices. The rate dropped four basis points, or 0.04 percentage point, this week.
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