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Seoul: Won, stocks firmer on BoE's rate cut and stimulus plan

Friday, August 5, 2016 - 10:44
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[SEOUL] The South Korean won and shares inched up early on Friday after the Bank of England (BoE) decided to cut interest rates and inject new stimulus into the British economy, reviving the global risk-on mood.

The won was quoted at 1,112.2 as of 0210 GMT, up 0.2 per cent compared to the previous close of 1,114.0.

The Korea Composite Stock Price Index (Kospi) was up 0.5 per cent at 2,009.93 points.

The BoE cut interest rates to a record low 0.25 per cent on Thursday and unleashed billions of pounds of stimulus to absorb the economic shock from Britain's vote to leave the European Union.

"Now, US July jobs report has the key for the won's next movement. The currency will step down below the 1,120 level if the data is positive enough," said Park Yuna, a foreign exchange analyst at Dongbu Securities.

US jobs data will be released later in the day.

Ms Park added that even if the data turned out to be worse than expected, the won would not strengthen past the 1,100 level since foreign exchange authorities were very likely to take measures to stabilise the currency's movement against the greenback.

The won looked set for a gain on the week, while the local equities were expected to show a fall.

Offshore investors were looked likely to be net buyers, purchasing 81.5 billion Korean won (S$97.9 million) worth of Kospi shares near mid-session.

Shares of LG Household & Healthcare Ltd fell 4.8 per cent while Amorepacific Corp lost 2.4 per cent as investors feared South Korea's Thaad deployment may have a negative impact on their exports to China.

Decliners outnumbered advancers 405 to 367.

September futures on three-year treasury bonds gained 0.04 point to 111.09.

REUTERS