Nov. 24 (Bloomberg) -- South Korea’s won slid to a six-week low and government bonds advanced as Germany failed to get sufficient bids at a debt auction, clouding prospects for the Asian nation’s export-driven economy.
Total bids at the auction of German securities due in January 2022 amounted to 3.889 billion euros, out of a maximum target for 6 billion euros, according to Bundesbank data yesterday. South Korea’s Finance Minister Bahk Jae said today the European debt crisis is increasing the volatility of financial markets and may not be solved in the short term. South Korea’s consumer confidence rose to a six-month high in November, central bank data showed today. The sentiment index rose to 103 in November from October’s 100.
“The won movements were affected by Europe’s debt concerns,” said Yu Won Jun, a Seoul-based currency dealer at Korea Exchange Bank. “There is speculation that the government intervened as the won fell below 1,160 per dollar.”
The won weakened for a fifth day, the longest run of losses since August, falling 0.6 percent to 1,158.80 per dollar in Seoul, according to data compiled by Bloomberg. The currency touched 1,160.50, the lowest since Oct. 14.
It is difficult to say from consumer confidence data that prospects are bright as some measures are still below 100, according to Jang Wan Sub, a senior economist in the central bank’s economic survey team. A sub-index measuring consumers’ outlook on the economy rose to 86 from 78 in October, central bank data shows. A reading of 100 indicates the number of optimists is equal to the number of pessimists.
The yield on South Korea’s 3.5 percent bonds due September 2016 fell one basis point, or 0.01 percentage point, to 3.48 percent, Korea Exchange Inc. prices show.
--Editors: Sandy Hendry, Brett Miller
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