You are here

Seoul: Won slips to near 2-mth low on global economic gloom, stocks up

23045848 - 06_02_2012 - forex7.jpg

[SEOUL] The South Korean won was trading at a near two-month low on Tuesday morning as the greenback continued to stay strong on worries about the health of the global economy.

The won stood at 1,173.8 to the US dollar, down 0.7 per cent compared with Monday's close of 1,165.8 as of 0210 GMT. The local currency reached its lowest level since March 17 against the greenback shortly after markets opened.

"Although the US jobs data released overnight lowered the possibility of two rate hikes this year, the broad slowdown of the Chinese economy and the global oil price drop are still pressuring the won," said Park Sung Woo, a foreign exchange analyst at NH Futures.

Data showed the US economy added the fewest jobs in seven months in April, leaving some economists to anticipate only one rate hike this year.

"There seems to be a high expectation that the Bank of Korea may lower interest rates at least once this year as some bond yields have been marking record lows recently. This may also drag the won down," added Mr Park.

The yields on three-year and five-year treasury bonds both stood at record lows on Monday at the end of trade.

Meanwhile, South Korean shares edged up as domestic institutions bought stocks.

The Korea Composite Stock Price Index (KOSPI) was up 0.4 per cent at 1,975.42 points.

However, offshore investors were expected to be sellers, offsetting 38.6 billion Korean won (S$45.10 million) worth of KOSPI shares near mid-session while institutions purchased 40.2 billion won net worth of shares.

Advancers outnumbered decliners 484 to 296.

Movie theatre operator CJ CGV Co Ltd rose to a 15-week high on its strong first-quarter results supported by positive performance overseas. Shares were traded up 3.5 per cent later on.

Automobile manufacturer Hyundai Motor Co was up 3.3 per cent and Kia Motors Corp up 2.8 per cent.

June futures on three-year treasury bonds gained 0.01 point to 110.47.

REUTERS