Oct. 12 (Bloomberg) -- South Korea’s won retreated from a two-week high after Slovakia’s parliament failed to approve changes to Europe’s bailout fund, bolstering the dollar and cooling demand for emerging-market assets. Government bonds fell as the jobless rate held near a three-year low.
The currency snapped a three-day gain as overseas investors sold more local shares than they bought today, adding to net sales of about $8 billion in the past three months. Slovak lawmakers need to vote again “as soon as possible” on an overhaul of the euro region’s bailout mechanism, Prime Minister Iveta Radicova said in Bratislava.
“The markets are swinging back and forth in tandem with progress or setbacks in Europe’s plans to stem the crisis,” said Park Joo Hyung, a Seoul-based currency dealer at Korea Exchange Bank. “The Slovakia rejection threw cold water on sentiment again. This, together with importers’ dollar demand, is driving the won lower.”
The won weakened 0.8 percent to 1,174 per dollar as of 8:49 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,160.80 yesterday, the strongest level since Sept. 23.
South Korea’s jobless rate was 3.2 percent in September, compared with a 3.1 percent level the previous month that was the lowest since July 2008, according to government data released today. That matched the median estimate in a Bloomberg News survey of 10 economists.
The yield on the government’s 3.5 percent bonds due September 2016 rose one basis point, or 0.01 percentage point, to 3.60 percent, according to prices from Korea Exchange Inc.
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