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Seoul: Won falls to near 1-week low on Yellen remarks, stocks edge down

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[SEOUL] The South Korean won fell sharply on Monday morning after US Federal Reserve Chair Janet Yellen's speech on Friday signalled a growing likelihood of an interest rate hike in June or July.

The won stood at 1,190.2 per dollar as of 0220 GMT, down 0.9 per cent compared to Friday's close of 1,179.3, and the lowest since May 24.

Ms Yellen said that the Fed should raise interest rates if the economy picks up, and said she expects such a move to be appropriate in coming months.

Park Yuna, a foreign exchange analyst at Dongbu Securities, said expectations for a Fed rate hike would keep the won under downward pressure.

She expects the won to fall to the 1,200 level if US economic data expected in coming days adds to rate increase expectations.

South Korean shares pared earlier losses on help of foreign stock-buying.

The Korea Composite Stock Price Index (Kospi) was down 0.1 per cent at 1,967.31 points.

Offshore investors were poised to be buyers, purchasing a net 50.5 billion Korean won (S$58.6 million) worth of Kospi shares near mid-session.

The sub-index for iron and steel was down 1.0 per cent, underperforming the broader market. Major steelmaker Posco was down 0.7 per cent.

Automobile manufacturer Kia Motors Corp shares were down 1.3 per cent.

Decliners outnumbered advancers 456 to 344.

June futures on three-year treasury bonds shed 0.13 point to 110.15.

REUTERS