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Seoul: Won slides to 6-week low, stocks wobble on Fed, N Korea worries
[SEOUL] The South Korean won slid to six-week low on Wednesday as growing expectations of another US interest rate hike this year and political tensions between the United States and North Korea continued to worry investors.
The US dollar rose after Federal Reserve Chair Janet Yellen warned on Tuesday it would be "imprudent" to keep policy on hold until inflation is back to 2 per cent. She also said the US central bank "should also be wary of moving too gradually" on rates.
President Donald Trump warned North Korea on Tuesday that any US military option would be "devastating" for Pyongyang, but said the use of force was not Washington's first option to deal with the country's ballistic and nuclear weapons programme.
As of 0245 GMT, the won stood at 1,139.6 to the US dollar, down 0.3 per cent from Tuesday's close and the weakest intraday trading level since Aug 18.
"The 1,140 level is like a bottom line for the won today even after the greenback strengthened much in the global markets overnight," said Jeong My Young, a foreign exchange analyst at Samsung Futures.
Mr Jeong added that North Korea risks are expected to linger, pressuring the won against other currencies.
South Korean shares wobbled in and out of negative territory, with investors reluctant to stake out fresh positions due to geopolitical risks and ahead of a long holiday break next week.
The Korea Composite Stock Price Index (Kospi) was at 2,374.35 points, barely moved from the previous close.
Offshore investors unloaded a net 144.3 billion Korean won (S$171.71 million) worth of Kospi shares near mid-session.
Market heavyweights were mixed with SK Hynix up one per cent and Posco down 1.4 per cent.
December futures on three-year treasury bonds shed 0.1 point to 108.70 due to heavy sell-off from foreign investors as geopolitical risks show very little signs of simmering down.