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Seoul: Won climbs to 3-month high, stocks edge down

Thursday, February 16, 2017 - 12:16

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[SEOUL] The South Korean won rallied to its highest intraday level in more than three months early on Thursday, after the US dollar pulled back in global markets.

The won was at 1,140.5 to the US dollar as of 0315 GMT, up 0.2 per cent compared with Wednesday's close of 1,142.2. It reached a high of 1,133.0, its strongest since Nov 9, 2016.

Aside from the US dollar's decline overnight, the increasing likelihood of the won being added to the list of currency manipulators by the United States seems to be supporting the won, said Paik Seok-Hyun, a foreign exchange analyst at Shinhan Bank.

"There are now more possibilities of South Korea being designated as one of the manipulating countries by the US, supporting the won," Mr Paik said, referring to the US Treasury's twice-yearly report that evaluates the currency policies of its major trading partners. The next report is due in April.

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Mr Paik added that improved investor sentiment following broad gains in major stock markets was also triggering higher demand for emerging currencies.

The won has risen 1.9 per cent so far against the US dollar this month, and is trading near one-year highs against the yen.

South Korea's Finance Minister Yoo Il-Ho said on Thursday he would soon speak with US Treasury Secretary Steven Mnuchin, after expressing concerns about media reports that described the won as an undervalued currency.

South Korean shares, which briefly touched 19-month intraday highs, edged down as inshore institutions offloaded local equities.

The Korea Composite Stock Price Index (KOSPI) was down 0.1 per cent at 2,081.22 points. It rose as high as 2,092.59 points immediately after opening, its strongest since July 17 of 2015.

Foreign investors were set to be net buyers, purchasing 53.4 billion won (S$66.46 million) worth of Kospi shares, while institutions sold a net 173.5 billion Korean won worth near mid-session, weighing on the index.

Shares of Samsung Electronics were one per cent up ahead of a decision on whether to issue an arrest warrant on Samsung Group chief Jay Y Lee over his role in a corruption scandal that has engulfed President Park Geun-Hye.

Doosan Bobcat Inc dropped 5.2 per cent, hurt by its weaker-than-expected fourth-quarter earnings.

Decliners outnumbered advancers 541 to 251.

March futures on three-year treasury bonds gained 0.03 point to 109.55.

REUTERS

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