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Seoul: Won rises to 3-week high, stocks firm on weak US data
[SEOUL] The South Korean won jumped to a three-week high early on Wednesday as downbeat economic data from the world's biggest economy dented already-low chances of the Federal Reserve raising interest rates as early as this month.
The won stood at 1,094.6 as of 0214 GMT, its highest since Aug 16, and up one per cent compared to Tuesday's close at 1,105.2.
The US dollar slumped after a survey showed US services sector activity slowed to a 6-1/2-year low in August amid sharp drops in production and orders, pointing to slowing economic growth.
"All the economic data from the US that came out in September were below expectations. The won will stay strong against the dollar even if Federal Reserve officials keep their hawkish stance," said Park Sung Woo, a foreign exchange analyst at NH Futures.
The won briefly trimmed its gains after San Francisco Fed President John Williams, a top Federal Reserve official, repeated his call for gradual interest rate hikes despite the weak services sector and other recent downbeat indicators. The won has since returned to its earlier level.
South Korean shares edged up, supported by foreign investors' demand.
The Korea Composite Stock Price Index (Kospi) was up 0.3 per cent at 2,072.80 points.
Offshore investors were set to be net buyers, purchasing a net 44.8 billion Korean won (S$55.11 million) worth of Kospi shares near mid-session.
Steelmaker Posco gained 2.5 per cent while tech firm LG Electronics Inc lost 1.3 per cent.
Decliners outnumbered advancers 461 to 341.
September futures on three-year treasury bonds gained 0.07 point to 110.86.