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Seoul: Won, stocks recoil after Trump threatens to scrap trade deal

Friday, April 28, 2017 - 11:23

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[SEOUL] The South Korean won and shares retreated on Friday after US President Donald Trump told Reuters he would either renegotiate or terminate a free trade deal with Seoul.

A high-ranking South Korean official said the government is adopting a "wait and see" stance, having not yet received any formal request for a renegotiation.

"Talk and actual policy are different," the official at the finance ministry, who declined to be identified, told Reuters.

The won stood at 1,132.6 against the US dollar as of 0237 GMT, down 0.2 per cent versus Thursday's close of 1,130.1.

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The Korea Composite Stock Price Index (Kospi) surrendered modest early gains and was down 0.1 per cent at 2,208.00 points.

"Trump's such negative comments about the Free Trade Agreement between the two countries can be understood as a sign of protectionism, pressuring the local currency," said Jung Sung-Yoon, a foreign exchange analyst at Hyundai Futures.

Mr Jung added, however, that it was too early to tell if the won would extend its losses against the US dollar, noting there is still much uncertainty over US fiscal policies including tax cuts and reforms which are weighing on the greenback.

Offshore investors were poised to snap a six-day buying streak, offloading a net 40.8 billion Korean won (S$50.3 million) worth of Kospi shares near mid-session.

Decliners outnumbered advancers 555 to 229.

Market heavyweight Samsung Electronics jumped to hit record high, gaining as much as 4.5 per cent, on hopes of strongest quarterly earnings ever for April-June period.

June futures on three-year treasury bonds gain 0.01 point to 109.46.

REUTERS

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