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Seoul: Won surges to 13-month high, stocks up on weak US economic data

Monday, August 1, 2016 - 10:57
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[SEOUL] The South Korean won and shares both rose early on Monday with the currency at a more than one-year high against the dollar after much weaker-than-expected US GDP data, tempering expectations for a US interest hike in coming months.

The won was quoted at 1,112.6 as of 0207 GMT after touching its strongest level against the dollar since June 26, 2015. It was up 0.7 per cent compared with the previous close of 1,120.2.

The Korea Composite Stock Price Index (Kospi) was up 0.7 per cent at 2,029.87 points. The index touched its highest intraday level since June 9 early in the session.

US economic growth remained tepid in the second quarter as inventories fell for the first time in nearly five years and business investment weakened further, offsetting robust consumer spending.

"We will have to see US jobs data coming out on Friday to see where the economy is heading," said Park Sung-woo, a foreign exchange analyst at NH Futures.

He added that exporters' dollar selling and offshore demand for the local currency to buy South Korean shares were all supporting the won on Monday.

South Korean exports in July fell at the fastest pace in three months, far worse than expected, but the trade ministry said it was due to temporary factors like fewer working days and ship exports and had little impact on markets.

Offshore investors were set to be buyers for 18 straight sessions, purchasing a net 133.4 billion Korean won (S$160 million) worth of Kospi shares near mid-session.

Market heavyweight Samsung Electronics Co Ltd looked set to replace its record-high level, and was trading up 2.1 per cent.

Web portal Naver Corp fell 2.3 per cent.

Decliners outnumbered advancers 407 to 379.

September futures on three-year treasury bonds gained 0.01 point to 111.15.

REUTERS