You are here

Seoul: Won at 3-1/2 month low on broad US dollar strength, Park's problems; stocks slip

31784840 - 03_06_2014 - msci4.jpg

[SEOUL] The won stumbled for a second day to a three-and-a-half month low, as the US dollar's broad strength on expectations of a US interest rate rise and President Park Geun-hye's political difficulties kept the South Korean currency weak.

The won lost around 0.2 per cent during morning trade, having lost nearly 1 per cent on Thursday as investors fretted over the possible fallout from an ongoing scandal over Ms Park showing a friend drafts of her speeches before delivering them.

A survey released Thursday by pollster Realmeter showed Ms Park's popularity has slumped to 17.5 per cent, the lowest since she took office in February 2013.

Analysts and policymakers told Reuters that most investors were watching for possible repercussions, but for now sentiment is more influenced by external factors, notably the strong chance of a US rate rise by the end of the year.

sentifi.com

Market voices on:

Parliament is currently discussing whether to appoint a special prosecutor to look into the matter.

The local currency was quoted at 1,144.8 against the US dollar as of 0220 GMT, weakening from Thursday's onshore close of 1,142.5. It touched its lowest level since July 14 this year shortly after markets opened.

"Other Asian currencies are recovering some ground against the dollar but the won is still weak," said a foreign exchange trader at a bank, who added exporters' dollar sales were keeping the won's fall in check.

South Korean shares also fell before midday as foreigners and institutions sold. A 1 per cent rise in market heavyweight Samsung Electronics Co Ltd slowed the bourse's fall.

The Korea Composite Stock Price Index (Kospi) was down 0.2 per cent at 2,020.62 points.

Foreign investors net sold 39.0 billion won (S$47.7 million)worth of Kospi shares near mid-session, while institutions offloaded 11.3 billion won worth.

SK Innovation shares were up 1 per cent after it said refining margins are expected to remain firm in the fourth quarter while reporting third-quarter results.

The Kospi 200 benchmark of core stocks was flat, while the junior Kosdaq edged down 0.7 per cent.

December futures on three-year treasury bonds lost 0.06 points to trade at 110.33.

REUTERS

Powered by GET.comGetCom