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Seoul: Won slumps on upbeat US jobs data, stocks edge up
[SEOUL] The South Korean won slumped on Monday as strong US employment data raised the possibility of another rate hike by the Federal Reserve this year, boosting the dollar.
The won stood at 1,114.0 as of 0217 GMT, down 0.3 per cent compared with the previous close of 1,110.4.
US employment rose more than expected for the second month in a row in July and wages picked up, bolstering expectations of faster economic growth and making a Fed rate increase this year seem more likely.
"Whether the US will raise its interest rates in September has become the biggest issue in the market due to the upbeat jobs report. If other economic indicators turn out as positive, a rate hike next month may be highly possible," said June Park, an economist at Daishin Economic Research Institute.
The Fed's next policy meeting is scheduled on Sept 20-21.
Ms Park said that the won will move in response to US economic data until the Fed's September meeting result.
South Korean shares edged up to a one-week intraday high reacting to a jump in US equities after the job report.
The Korea Composite Stock Price Index (Kospi) was up 0.2 per cent at 2,022.82 points.
Foreign investors were poised to be sellers, offloading a net 17.4 billion Korean won (S$21 million) of Kospi shares near mid-session.
Steel shares slumped on US Commerce Department's decision to set anti-dumping duties on hot-rolled flat steel from Japan, South Korea, Turkey, Britain, Brazil, the Netherlands and Australia. Posco fell as much as 4.1 per cent and Hyundai Steel Co 3.4 per cent.
Decliners and advancers were almost even by 387 to 377.
September futures on three-year treasury bonds shed 0.05 point to 111.04.