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3 years ago
S.Korean won hits 6-week high as safe-haven flight weighs on dollar; shares wander
December 17, 2014 / 2:21 AM / 3 years ago

S.Korean won hits 6-week high as safe-haven flight weighs on dollar; shares wander

* Won up as risk aversion supports yen, points to dovish Fed
    * Shares wander; foreigners continue to sell amid risk-off
mood

    By Joonhee Yu
    SEOUL, Dec 17 (Reuters) - The South Korean won firmed
against the dollar on Wednesday to register a six-week high,
supported by a safe-haven rebound in the yen amid
plunging oil prices and a financial crisis brewing in Russia.
    The won was quoted at 1,084.1 to the dollar as of
0150 GMT, compared to 1,086.7 at Tuesday's session close. 
    The U.S. Federal Reserve is set to conclude its two-day
policy meeting later on Wednesday, where forecasters are divided
on whether or not the central bank will keep the phrase
"considerable time" to describe the timing of its next rate
hike.
    But in the light of recent market jitters triggered by a
relentless fall in oil prices as well as financial turmoil in
Russia, there are growing expectations that the Fed may be
inclined to take a more cautious stance.
    "Even if the Fed removes the key phrase from its policy
statement, any dollar gains may be capped with U.S. bond yields
at such low levels and investors continually trimming their long
positions to book profits on recent gains," said Hong Seok-chan,
an FX strategist at Daishin Economic Research Institute.
    Nervous investors took safe-haven cover in the yen,
easing concerns over possible market intervention by South
Korean financial authorities who have repeatedly stressed the
danger posed by a weak yen to local exporters.
    South Korean shares were trading flat after a choppy trading
session, with limited support from bargain-hunting offset by
broad risk-off sentiments which prompted offshore investors to
exit the market for a sixth straight day.
    The Korea Composite Stock Price Index (KOSPI) ticked
0.05 percent higher at 1,905.12 points as of 0150 GMT.
    Foreign investors sold a net 127.4 billion won ($117.58
million) worth of shares on the main bourse, having slashed a
net 1.92 trillion won ($1.77 billion) from their portfolios in
the previous five sessions.
    Recently pummelled shipyards and energy counters posted 
gains as bargain-seeking investors bought on the dips.
    SK Innovation, South Korea's largest refiner,
rose 3.1 percent while Daewoo Shipbuilding & Marine Engineering
 gained 1.6 percent.
    Shares in Korean Air fell 0.6 percent, with the
company facing possible punitive action such as flight
suspensions if former Vice President Cho Hyun-ah is found guilty
of violating aviation safety laws during the infamous "nutrage"
incident.
    March futures on three-year treasury bonds shed 8
basis points to trade at 107.98. 
    
                       0150 GMT    Prev close
 Dollar/won             1,084.1       1,086.7
 Yen/won             9.2815/890        9.2760
 *KTB futures            107.98        108.06
 KOSPI                 1,905.12      1,904.13
 * Front-month futures on three-year treasury bonds

 (Editing by Eric Meijer)

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