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Seoul: Won falls as Draghi easing remarks strengthen dollar; shares up

Tuesday, February 16, 2016 - 10:16
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[SEOUL] The South Korean won weakened against the dollar on Tuesday, which strengthened after European Central Bank President Mario Draghi said the ECB is ready to ease policy further in March.

The won was quoted at 1,215.9 against the dollar, down 0.7 per cent from Monday's close of 1,208.1.

South Korea's central bank kept interest rates unchanged for an eighth straight month on Tuesday, as expected, while monitoring the effects from global policy changes on the slowly recovering local economy.

The market was awaiting a news conference by Bank of Korea Governor Lee Ju-yeol due to begin at 0220 GMT.

"Under risk-on sentiment, the won is likely to move, mirroring the greenback. Persistent foreign selling of local stocks and bonds also weighed on the currency," said Jung Sung-yoon, a foreign-exchange analyst at Hyundai Futures.

"We'll have to see if yuan strengthens during the session,"Jung added.

South Korean shares rose on Tuesday morning, as investors concluded that local stocks had already been oversold, yet they remained on edge from lingering concerns about global growth and the health of the financial sector.

The Korea Composite Stock Price Index (KOSPI) was up 0.6 per cent at 1,873.10 points as of 0130 GMT. Advancing issues outnumbered decliners two to one.

Refiners and energy sectors gained, with SK Innovation Co Ltd up 3.1 per cent and LG Chem Inc up 2 per cent.

Shares in Samsung Electronics Co Ltd rose 1.3 per cent, while Hyundai Motor Co advanced 1.1 per cent.

Foreign investors sold a net 30.5 billion Korean won (S$35.2 million) worth of KOSPI shares by midday.

The KOSPI 200 benchmark of core stocks was up 0.5 per cent, while the junior KOSDAQ gained 1.7 per cent higher.

March futures on three-year treasury bonds shed 0.03 points at 110.19.

REUTERS