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Seoul: Won falls to 2-year low after Yellen; shares edge up


[SEOUL] The South Korean won joined most regional peers in falling against the dollar on Thursday morning, touching its weakest in two years.

The won was down 0.4 per cent at 1,148.2 per dollar, after touching a morning low of 1,150.0, the lowest since July 8, 2013.

The dollar firmed on growing expectations that the Federal Reserve may increase US interest rates as early as September after Fed Chair Janet Yellen affirmed the view of a central bank prepared to gradually raise rates.

"The Fed chief focused on the pace of stabilising rates, so investors expected the Fed would hike rates sooner, possibly in September, and nudging interest rates higher," said Jung Kyung-parl, a currency analyst at KEB Futures.

"The won can fall as low as 1,163 level in July as foreign exchange markets concentrate on the Fed's rate hike following the Greek parliament passing austerity measures," Mr Jung added.

Before Seoul markets opened, the Greek parliament passed sweeping austerity measures demanded by lenders to open talks on a new multibillion-euro bailout package to keep Greece in the euro.

Meanwhile, Seoul shares edged up as Fed Chief Yellen affirmed a likely interest rate increase this year, offsetting easing concerns over Greece after its parliament passed the measures.

The Korea Composite Stock Price Index (KOSPI) was up 0.3 per cent at 2,078.91 points from the previous close at 2,072.91. Gainers led losers by 1.4 to 1.

Samsung C&T Corp and Cheil Industries Inc rose 2.7 per cent and 4.6 per cent, respectively, on expectations for Samsung units' merger ahead of Samsung C&T's shareholder meeting on Friday.

POSCO, the world's sixth-largest steelmaker, lost 2.9 per cent after falling as much as 3.8 per cent to 201,000 won, the lowest since Jan 24, 2006.

Foreigners were poised to be net sellers in the local stock market, selling a net 14.8 billion won (S$17.6 million) worth of KOSPI shares by midday.

September futures on three-year treasury bonds were up 0.02 point at 109.11.