Seoul: Won slips to almost 4-yr low on Fed uncertainty; shares choppy

[SEOUL] The South Korean won slipped to its weakest in nearly four years against the US dollar on Monday morning, as a mixed US jobs report failed to offer much clarity on the timing of the Federal Reserve's first rate hike in almost a decade.

The won was down 0.4 per cent at 1,198.5 per dollar as of 0210 GMT. It opened as low as 1,202.0 per dollar, the weakest intraday level since Oct 4, 2011.

Dealers suspected dollar-selling smoothing operations by foreign exchange authorities to curb the won's sharp fall.

On Friday, data showed US job growth slowed in August, but the unemployment rate dropped to a near 7-1/2-year low and wages accelerated. "The report gave mixed signals for the job market in US, but an improvement in wages bolstered market consensus of a rate hike in Sept," said Yuna Park, a foreign-exchange analyst at Dongbu Securities.

Ms Park expects the won to breach 1,200 per dollar, and probably touch 1,210 for the week. "Risk aversion still weighs on the won as investors are keeping an eye on China." Seoul shares were choppy and were last down 0.1 per cent to 1,884.91 points after touching a morning low of 1,870.59, the weakest in nearly two weeks. "Local share markets rebounded (briefly) as Chinese stocks were stabilising after long weekend," said Shawn Oh, a market strategist at Daishin Securities.

But continued foreign selling weighed on the market. By midday, they have offloaded a net 78.4 billion won (S$93.1 million) worth of shares on the main board.

Market heavyweight Samsung Electronics Co Ltd, which makes up 14 per cent of the main bourse's market value, lost 1.6 per cent.

Car makers gained on expectations that a weak won could help sharpen their export competitiveness and boost earnings.

Market bellwether Hyundai Motor Co Ltd was up 1.7 per cent. Kia Motors Corp, the second-larges auto maker in South Korea and an affiliate of Hyundai Motor, rose as much as 2.8 per cent to 50,300 won, the highest in almost four months.

September futures on three-year treasury bonds were 109.68 points, unchanged from the previous close.

REUTERS