Bloomberg News

Korea Won Trades Near 1-Week Low as Producers’ Confidence Drops

December 28, 2011

Dec. 28 (Bloomberg) -- South Korea’s won traded near a one- week low as manufacturers’ confidence in Asia’s fourth-biggest economy slid to a 30-month low. Government bonds were steady.

An index measuring expectations for January was 79, the least since July 2009, the Bank of Korea said in a statement in today. Most investors have closed trading books as the year-end nears, according to Ha Jun Woo, a currency dealer at Daegu Bank in Seoul.

“The trading volume is very shallow,” Ha said. “It’s a market moved by orders from exporters and importers, rather than by economic data.”

The won was little changed at 1,157.80 per dollar as of 9:36 a.m. in Seoul, compared with 1,158.68 yesterday, according to data compiled by Bloomberg. It touched a one-week low of 1,160.09 yesterday. The currency has fallen 2.7 percent so far this year, set for its first decline since 2008.

South Korea’s financial regulator is boosting monitoring of market speculation related to North Korea, Financial Supervisory Service spokeswoman Kim Soo Mi said today. The Kospi Index of shares fell 0.8 percent yesterday, with losses spurred by rumors surrounding the health of the new North Korean leader, Kim Jong Un. North Korea today lays to rest Kim Jong Il, who developed nuclear weapons while more than 1 million of his people starved to death.

The yield on the 3.5 percent bonds due September 2016 was unchanged at 3.52 percent, according to Korea Exchange Inc. prices. Benchmark five-year rates dropped 56 basis points this year, set for a second annual decline, according to data compiled by Bloomberg.

--Editors: Ven Ram, Sandy Hendry

To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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