- Crude breaks psychological barrier that’s held since November
- Korean stocks closer lower after swinging from gains to losses
South Korea’s won posted its biggest two-day gain in a month on signs appetite for riskier assets is improving as oil rebounded above $50 a barrel.
Brent crude broke through the key psychological price barrier on Thursday that’s held since November, driving an advance in emerging-market currencies at the expense of the dollar. And while a gauge of domestic consumer confidence dropped in May, investors seem emboldened by data showing the U.S. economy is gaining traction, which could help support demand for local exports from the nation’s second-biggest trading partner after China.
“Appetite for risk strengthened a bit but we will have to see whether this is a trend or a short-term spell,” said Stephen Lee, a Seoul-based economist at Samsung Securities Co. “U.S. rate-hike speculation is still there. The latest economic data point to a gradual but strong recovery momentum, which is a good thing for the global economy as well.”
The won rose 0.2 percent to 1,180.45 per dollar by the close in Seoul, according to prices from local banks compiled by Bloomberg, adding to Wednesday’s 0.9 percent advance that was the steepest since April 28.
The Bloomberg Dollar Spot Index tracking the greenback against 10 major peers retreated for a second day after rising above 1,200 on Tuesday for the first time since March 29. Interest-rate futures show investors are starting to price in July as most likely for a Federal Reserve increase, with odds of 54 percent compared with 26 percent at the start of the month.
The Bank of Korea reported on Thursday that its consumer confidence index declined to 99 in May from April’s 101 reading. The Kospi index of shares closed down 0.2 percent.
South Korea’s government bonds fell, with both the 10- and three-year yields rising one basis point to 1.79 percent and 1.47 percent, respectively, Korea exchange prices show. A Bloomberg index of the nation’s local-currency notes is up 0.2 percent this month following a similar gain in April.