Seoul: Won slips to 2-yr low on strong US data; shares down

[SEOUL] The South Korean won slipped to a two-year low on Monday morning as solid US inflation and housing data backed expectations for the Federal Reserve to raise interest rates in coming months.

The won was down 0.4 per cent at 1,151.5 on the dollar as of 0236 GMT after touching a morning low of 1,152.0, its weakest since July 8, 2013. It closed at 1,147.5 on Friday.

Jung Kyung-parl, a currency analyst at KEB Futures, said traders were closely watching the performance of the Chinese markets as worries of another fall linger.

"The won could fall to around 1,163 on any further declines in China's stock markets," Jung said, adding that continued strength in the dollar will remain another headwind.

Seoul shares edged down in sympathy with sluggish Asian stocks.

The Korea Composite Stock Price Index (KOSPI) was down 0.1 per cent at 2,073.84 points.

"Two big issues will be in focus for investors. One is the prospect of higher interest rates in the US and the other is the upcoming earnings season," said Kang Hyun-gie, a stock analyst at Dongbu Securities.

Market heavyweight Samsung Electronics Co Ltd shed 1.5 per cent.

LG Chem Ltd rose 2.7 per cent after its operating profit beat market expectations.

Naver Corp, South Korea's largest web portal operator, jumped 4.0 per cent to 657,000 won, the strongest since June 26 after Google Inc reported solid ad revenue growth.

Naver was last up 2 per cent on expectations its second quarter results will beat market consensus.

Foreign investors were poised to be net sellers, offloading a net 45 billion won (S$53.6 million) worth of stocks in the main board by midday.

September futures on three-year treasury bonds were quoted at 109.12 points, unchanged from the previous close.

REUTERS