Seoul: Won rebounds sharply from 5-week trough on US data; shares up

[SEOUL] The South Korean won rebounded from a five-week low against the dollar on Friday, garnering support from a stronger yen and reflecting broad dollar weakness after a set of lacklustre US economic data.

The local currency was quoted at 1,099.7 to the dollar as of 0200 GMT, compared to 1,110.7 seen at the end of Thursday's session.

The dollar was hit by Thursday's data showing weaker-than-expected US retail sales and jobless claims, which took some of the shine off recent optimism surrounding the world's largest economy.

Further support was provided by a stronger yen which dampened the risk of market intervention by financial authorities to keep the won's strength in heck, allowing investors to chase the local currency with more comfort.

The yen/won cross rate was sitting at 9.2419, moving further away from the perceived danger threshold of 9.1.

"Although the latest US data isn't enough to derail expectations of a mid-year rate hike all on its own, it gave enough cause to believe that the won had been oversold," said Hong Seok-chan, an FX strategist at Daishin Economic Research Institute.

South Korean shares edged higher on Friday as risk appetites were bolstered by news of a ceasefire agreement in Ukraine as well as hopes of a debt agreement between Greece and its creditors.

Investors were relieved by the reported ceasefire for Ukraine, where a bitter stand-off between Russia and the West over the escalating conflict has been a constant source of unease for the financial markets over the past year.

The Korea Composite Stock Price Index (KOSPI) was up 0.35 per cent at 1,948.39 points as of 0200 GMT.

Oil-linked sectors outperformed after an overnight rally in crude prices with LG Chem climbing 2.8 per cent while S-Oil rose 2.2 per cent.

Foreign investors underpinned the main bourse as offshore funds bought a net 56.6 billion won (US$51.5 million) worth of KOSPI shares by late morning.

The KOSPI 200 benchmark of core stocks gained 0.39 per cent while the junior, tech-heavy KOSDAQ index was up 0.63 per cent.

March futures on three-year treasury bonds added 7 basis points to trade at 108.43.

REUTERS