Won drops on speculation of uptick in dollar buying

South Korea's won declined on speculation importers stepped up dollar buying to settle bills. The currency gained as much as 0.4 per cent earlier after US data released on December 23 showed durable-goods orders rose the most in four months in November while sales of new homes increased to a seven-month high, supporting optimism that the global recovery is intact. South Korean government bonds rose as economists in a Bloomberg survey predicted that official data on Thursday will show that growth in industrial output slowed to 5.9 per cent last month from 6.2 per cent in October. "Importers demanding dollars for bill settlement was stronger than exporters selling," said Cho Youngbok, a currency dealer at Daegu Bank in Seoul. "Trading volume was low as the year-end neared, and currency prices moved on small orders." Benchmark rates The won retreated 0.4 per cent to 1,154.90 per dollar, according to data compiled by Bloomberg. The currency has dropped 2.5 per cent so far this year. The yield on the 3.5 per cent bonds due in September 2016 fell one basis point, or 0.01 percentage point, to 3.52 per cent, according to Korea Exchange Inc prices. Benchmark five-year rates slid 56 basis points this year, according to data compiled by Bloomberg.