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Seoul: Won jumps as Trump overshadows Samsung chief's woes

Wednesday, January 18, 2017 - 10:51

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[SEOUL] The South Korean won rallied on Wednesday as US President-elect Donald Trump's comment that the US dollar is too strong resulted in broad pressure on the greenback.

The won was quoted at 1,166.0 to the US dollar as of 0205 GMT, up 0.7 per cent compared to Tuesday's close of 1,174.5.

The South Korean currency has been unaffected by the possibility that the head of the Samsung Group, South Korea's largest conglomerate, could be arrested as a result of the corruption scandal that last month led to parliament impeach President Park Geun-Hye.

Accused of bribery, Jay Y Lee appeared on Wednesday at a court, where a judge will decide whether to grant the country's special prosecutor a warrant for the arrest of the Samsung Group leader.

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As elsewhere, domestic factors were trumped by the advent of a new US administration.

"Trump's inauguration on Friday will be the biggest event in the global market for the time being. The US dollar is likely to get weaker against a basket of currencies until as late as the end of April," said Kim Doo-Un, a foreign exchange analyst at Hana Futures.

A sell-off in the US dollar deepened in international markets after US traders returned from a long weekend after Martin Luther King Jr Day and reacted to Mr Trump's weekend comments.

In an interview with the Wall Street Journal, Mr Trump said US companies "can't compete with (China) now because our currency is strong and it's killing us."

South Korean shares were flat as the Wall Street slumped on concerns over potential risks posed by Trump's protectionist leanings.

The Korea Composite Stock Price Index (Kospi) was slightly down at 2,071.64 points.

Having dropped earlier in the week on the case against Mr Lee, Samsung Electronics was steadied by 0.5 per cent in morning trade on Wednesday.

Offshore investors were poised to be small net sellers of Kospi shares near mid-session.

Tech firm LG Electronics gained 2.5 per cent while Korea Electric Power Corp lost 1.1 per cent.

Decliners outnumbered advancers 418 to 342.

March futures on three-year treasury bonds lost 0.04 point to 109.64.

REUTERS

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