By Bob Chen
April 15 (Bloomberg) -- South Korea’s won weakened for the first time in three days after an unexpected drop in U.S. retail sales fanned concern a global recession is deepening, prompting investors to seek safer bets than emerging-market assets.
Global shares also retreated, dragging the Standard & Poor’s 500 Index from a two-month high and the Kospi index from its best closing level since October. South Korea last month reported an unemployment rate of 3.5 percent for February, the highest in more than two years, and Finance Minister Yoon Jeung Hyun today said the local jobs market is likely to remain weak.
“It’s a modest adjustment, it’s natural given that U.S. stocks were down a bit,” said Thomas Harr, a senior currency strategist at Standard Chartered Bank in Singapore. “It depends a lot on what happens with U.S. stocks and risk appetite generally. Risk appetite is still kind of high” so weakness in the won may be limited.
The won fell 0.6 percent to 1,330.75 per dollar as of 9:57 a.m. local time, according to data compiled by Bloomberg. Foreign investors sold more local shares than they bought for the first time in five days, contributing to a 0.6 percent decline in the Kospi.
The S&P 500 Index of U.S. stocks slid 2 percent yesterday after the Commerce Department reported a 1.1 percent decrease in March retail sales. Economists surveyed by Bloomberg forecast a 0.3 percent gain.
South Korea’s economy will shrink 2.4 percent this year, the first contraction since 1998, the central bank forecast on April 10.
To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net
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