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Seoul: Won at fresh 5-1/2 yr low on dollar strength; stocks muted
[SEOUL] The South Korean won was trading near fresh multi-year lows on Monday, pressured by strength in the US dollar after solid economic data revived bets for higher interest rates there.
The local currency was quoted at 1,241.3 against the dollar as of 0222 GMT, down 0.3 per cent from its onshore close of 1,238.2 on Friday and trading at its lowest intraday levels since June 2010.
"The won is expected to try to sit squarely in the 1,240-won range today on external uncertainties and the strong dollar, but movements will be capped on intervention concerns," said Park Sung-woo, an analyst at NH Futures in Seoul.
Market participants were wary over possible dollar-buying market smoothing by foreign exchange officials to support the currency as the government and central bank have recently warned against sudden herd movements in the market.
Data out on Friday showed consumer spending rose solidly in January while underlying inflation picked up by the most in four years. Fourth quarter gross domestic product growth was revised higher to 1.0 per cent in annual terms.
South Korean shares showed subdued trading early in the session.
The Korea Composite Stock Price Index (KOSPI) was nearly flat at 1,920.28 points.
Securities led the bourse's gains up 2.4 per cent, with Korea Investment Holdings Co Ltd trading up 2.3 per cent and Samsung Securities up 1.9 per cent by midday.
Shares in electricity and gas were down 2.2 per cent as Korea Electric Power Corp fell 2.5 per cent and Samchully slipped 1.3 per cent.
Foreign investors purchased a net 131.8 billion won (S$149.62 million) worth of South Korean stocks near midday.
Winners outnumbered losers 426 to 353.
March futures on three-year treasury bonds ticked uo 0.01 points to trade at 110.34.