South Korea’s won erased an earlier gain and fell to a two-year low after a slump in Chinese equities prompted investors to seek safety in the dollar.
China’s stocks fell for a second day, reversing recent gains sparked by unprecedented government intervention as hundreds of companies resume trading after suspending their shares. Wednesday’s data showing better-than-estimated second-quarter growth in Asia’s largest economy, and South Korea’s biggest overseas market, failed to boost Chinese shares.
The won fell 0.1 percent to close at 1,143.55 a dollar in Seoul, data compiled by Bloomberg show. The currency earlier rose as much as 0.3 percent and then dropped to 1,144.14, the lowest since July 2013. It has weakened 4.6 percent this year.
“Risk-off sentiment spread as China’s stock market didn’t respond to better-than expected growth data,” said Ryoo Hyun Jung, the chief currency trader at Citibank Korea Inc. in Seoul. “We’ve noticed strong dollar-buying against the won by offshore investors recently.”
South Korea’s jobless rate was unchanged at 3.9 percent in June, Statistics Korea reported Wednesday. The median estimate in a Bloomberg survey was 4 percent.
Government bonds rose, with the 10-year yield falling one basis point to 2.50 percent, according to Korea Exchange prices. The three-year yield was steady at 1.80 percent.