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Seoul: Won, stocks jump to year's high on dovish Fed stance

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The South Korean won surged to its highest level this year on Thursday after the US Federal Reserve revised the number of times it would hike rates this year, pressuring the greenback.

[SEOUL] The South Korean won surged to its highest level this year on Thursday after the US Federal Reserve revised the number of times it would hike rates this year, pressuring the greenback.

The local currency was quoted at 1,174.4 per dollar, up 1.6 per cent compared to Wednesday's close at 1,193.3. It reached as high as 1,173.0 shortly after trading opened, its best level since Dec 31 last year.

The gains were capped somewhat by wariness against possible intervention by foreign exchange authorities who have repeatedly warned they would act if rates moved too quickly.

"We might see the local currency's strength be sustained for a bit, but we need to keep a close eye on global oil prices,"said Jung Sung-yoon, a foreign exchange analyst at Hyundai Futures.

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South Korean shares hit a three-month high in response to the Fed's dovish approach while offshore investors continued their buying spree.

The Korea Composite Stock Price Index (KOSPI) was up 1.1 per cent to 1,997.12 points as of 0154 GMT. It strengthened to its highest since Dec 24 in early trade.

Foreign investors were set to be net buyers for six straight sessions, purchasing a net 198.1 billion Korean won worth of KOSPI shares near mid-session, buttressing the index.

Advancing issues outnumbered decliners 494 to 296.

The electric & electronics sub-index was up 1.9 per cent with Samsung Electronics Co Ltd up 2.2 per cent and LG electronics Inc up 1.3 per cent.

Steelmakers' shares also rose. Posco was up 3.2 per cent and Hyundai Steel Co rose 4.1 per cent.

Consumer electronics screen maker LG Display Co Ltd was up 1.6 per cent after announcing it will build a new production plant to manufacture OLED lighting panels.

June futures on three-year treasury bonds gained 0.09 point to 110.11.

REUTERS

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