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Seoul: Won, shares fall after upbeat US economic data

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The South Korean won slid against the dollar by midday on Monday and stocks fell as Friday's strong US economic data bolstered prospects of a Federal Reserve rate hike next month.

[SEOUL] The South Korean won slid against the dollar by midday on Monday and stocks fell as Friday's strong US economic data bolstered prospects of a Federal Reserve rate hike next month.

The won slightly cut its losses just after China's central bank set the yuan midpoint rate at 6.3969 to the dollar firmer than the previous session's fix of 6.3975.

The South Korean won was down 0.8 per cent at 1,183.1 per dollar as of 0214 GMT.

"The effect of the Chinese yuan on the won should be weaker as time goes by, while market participants are focused on the timing of the Fed's rate hike," said Yuna Park, a foreign-exchange analyst at Dongbu Securities.

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The dollar rose on Friday after US producer prices and industrial data output underpinned expectations for a Federal Reserve's rate hike next month.

The Korea Composite Stock Price Index (KOSPI) fell 0.6 per cent at 1,972.16 points. Losers outnumbered gainers by 2 to 1.

"The stock market's direction is vague today, while a weak won let foreigners sell local equities," said Kim Yoon-seo, a stock-analyst at KTB Investment & Securities.

Market heavyweight Samsung Electronics Co Ltd lost as much as 2.7 per cent to 1,109,000 won, the lowest since Oct 29, 2014.

Steel maker Posco shares fell 2.9 per cent, while chipmaker SK Hynix Inc slipped 2.2 per cent.

Kia Motors Corp was down 1 per cent.

Offshore investors were poised to be net sellers for a eighth straight session, offloading a net 130.8 billion won (S$155.75 million) worth of stocks in the main board on the day.

September futures on three-year treasury bonds were down 0.04 point at 109.34.

REUTERS

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