Seoul: Won slips to a 3-week as Fed, BOJ decisions awaited

[SEOUL] The South Korean won dropped to a 3-week low against the US dollar on Monday as stronger-than-expected US inflation data added to market jitters ahead of a Federal Reserve meeting this week.

The won was quoted at 1,121.4 as of 0220 GMT, down 0.2 per cent compared to the previous close of 1,118.8. It touched its lowest level since Aug 29 earlier in the session.

US consumer prices in August pointed to a steady build-up of inflation that could allow the Federal Reserve to raise interest rates this year. Markets see a roughly 50-50 chance of a rate rise in December.

"CPI is what the Fed considers the most along with the employment data when deciding on its next policy movement," said Jung Sung Yoon, a foreign exchange analyst at Hyundai Futures.

Both the Fed and the Bank of Japan will hold policy meetings on Sept 20-21.

South Korean shares extended their gains as foreign investors purchased more equities.

The Korea Composite Stock Price Index (Kospi) was up 0.5 per cent at 2,010.28 points.

Offshore investors were poised to be net buyers, purchasing 30.6 billion Korean won (S$37.27 million) worth of Kospi shares near mid-session, buttressing the index.

The sub-index for electric and electronics companies rose more than 2 per cent with Samsung Electronics Co Ltd up 2.1 per cent and SK Hynix Inc up 3.3 per cent.

Decliners outnumbered advancers 406 to 389.

September futures on three-year treasury bonds were even at 110.60.

REUTERS