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Seoul: Won slips to one-week low ahead of Fed, stocks steady

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The South Korean won slumped to a one-week low in early trade on Monday as the US dollar firmed broadly ahead of a Federal Reserve policy meeting where interest rates are expected to be raised again to follow a hike late last year.

[SEOUL] The South Korean won slumped to a one-week low in early trade on Monday as the US dollar firmed broadly ahead of a Federal Reserve policy meeting where interest rates are expected to be raised again to follow a hike late last year.

The won was quoted at 1,170.3 against the US dollar as of 0219 GMT, down 0.4 per cent from its previous close of 1,165.9.

During morning trading it traded at lows last seen on Dec 5.

"The US dollar's path is quite clear. It lost some ground towards the end of the weekend but now it's jumped back up and if the yuan softens midday we'll see the won falling further," said a foreign bank dealer in Seoul.

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South Korean shares opened at their highest level since Oct 25 as investors felt some uncertainty in the market was erased after South Korean lawmakers voted overwhelmingly on Friday to impeach President Park Geun-hye over an influence-peddling scandal.

However, the modest gains were quickly erased as foreigners took profits ahead of the Fed meeting, with the Korea Composite Stock Price Index (Kospi) trading down 0.01 per cent at 2,024.40 points.

On Sunday, South Korea's regulator said authorities were ready to punish those who attempt to disrupt markets amid volatility sparked by the political issue at home on top of uncertainties abroad.

Construction shares rallied more than 3 per cent after oil prices shot up early on Monday on hopes higher revenues in the Middle East from oil would benefit South Korean builders there.

Electricity and electronics stocks were down 1.4 per cent.

December futures on three-year treasury bonds were trading down 0.05 points at 109.27.

REUTERS

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