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Seoul: Won higher as US dollar sags after ECB, stocks wobble

Friday, July 21, 2017 - 10:46

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[SEOUL] The South Korean won edged up early on Friday as a broad rally in the euro pressured the US dollar, after the European Central Bank President Mario Draghi said tapering of its stimulus will be on the table for discussion this autumn.

The won was quoted at 1,122.8 as of 0157 GMT, up 0.2 per cent compared to Thursday's close of 1,125.5.

"The won is now moving up, responding to dollar weakness but further gains seem less likely as investors are aware that the (ECB) tapering can somehow result in risk-off sentiment, driving money out from the local markets," said Jung Sung-Yoon, a foreign exchange analyst at Hyundai Futures.

Global financial markets have been buffeted over the past few weeks on speculation over the timeline for the ECB to run down its asset purchase programme, with signs the US Federal Reserve will take a more cautious approach to tightening policy also keeping investors on their toes.

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The won is likely to hold around current levels for the rest of the day, said Jung.

South Korean shares wobbled in and out of the black as investors stepped back after a six-day rally that was spurred by optimism over domestic earnings and a generally positive outlook for the global economy.

The Korea Composite Stock Price Index (Kospi) stood at 2,442.41 points.

Offshore investors were set to be net buyers of Kospi shares, purchasing 62.6 billion Korean won (S$76.22 million) worth near mid-session.

Most major financial companies rose on upbeat second-quarter earnings guidance. KB Financial Group Inc rose nearly 4 per cent while Shinhan Financial Group Co Ltd gained 3 per cent.

LG Display, which suffered its biggest daily percentage drop in nearly six years on Thursday, recovered a little to rise by more than one per cent.

The shares of LG Chemical rose as much as 3.7 per cent.

Decliners outnumbered advancers were almost even.

September futures on three-year treasury bonds gained 0.08 point to 109.31.

REUTERS

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