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Seoul: Won, stocks strengthen as dollar weakens after Fed meeting
[SEOUL] The South Korean won and shares rose to multi-month highs early on Thursday as the US dollar stayed flat after the US Federal Reserve gave no further clues over future rate moves while keeping to its positive outlook for the US economy.
The won stood at 1,153.4 to the US dollar as of 0227 GMT, up 0.4 per cent versus the previous close of 1,158.1. It briefly reached its highest since Nov 10, 2016, shortly after markets opened, but some gains were erased as importers bought US dollars.
The Korea Composite Stock Price Index (Kospi) was up 0.2 per cent at 2,083.95 points after touching 2,092.45, which was the highest since July 17, 2015.
"The won seems to be getting more support as the Fed's stance was in line with market expectations. Worries over fast rate hikes were also calmed," said Ha Keon-Hyeong, a foreign exchange analyst at Shinhan Investment Corp.
He added that US employment data due on Friday may give the greenback a chance to rebound, but if not, the won could possibly firm to the 1,130-1,140 range in the near term.
South Korean consumer prices rose at their fastest pace in more than four years in January, but had little impact on markets.
Offshore investors were set to be net buyers, purchasing 67.4 billion Korean won (S$82.55 million) worth of Kospi shares near mid-session, buttressing the index.
Shares of S-Oil Corp rose more than 2 per cent. The company said on Thursday it is optimistic that refining margins will remain healthy as global oil demand growth will outstrip incremental supply in 2017.
Tech giant Samsung Electronics gained nearly one per cent, lending moderate support to the index.
March futures on three-year treasury bonds were unchanged at 109.39.