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S.Korea won nears 3-mth low on U.S. rate hike fears, stocks dither
October 17, 2016 / 2:42 AM / a year ago

S.Korea won nears 3-mth low on U.S. rate hike fears, stocks dither

* Fed's Dec rate hike fear, U.S. currency report weigh on
the won
    * Foreigners set to mark a third straight stock-buying

    SEOUL, Oct 17 (Reuters) - The South Korean won 
slumped early on Monday as positive U.S. economic data
strengthened views that the Federal Reserve will hike interest
rates in December. The won also caught a chill from a U.S.
treasury currency report that kept South Korea on its monitoring
    The won stood at 1,140.7 against the dollar as of
0223 GMT, 0.8 percent weaker than its previous close of 1,132.1.
It touched its weakest intraday level since July 26 of this
    Data late last Friday showed U.S. retail sales rebounded in
September amid a surge in motor vehicle purchases and rise in
discretionary spending, while other data also suggested a pickup
in inflation. 
    "There will be a slowdown in the won's movement once it
extends falls past the 1,140 level, but it is largely expected
to stay weak due to growing wariness in the market over the
Fed's pending rate hike," said Jung Sung-yoon, a foreign
exchange analyst at Hyundai Futures.
    Jung added that the U.S. Treasury's comment about South
Korea in its currency report over the weekend was also impacting
the won short-term.
    The U.S. Treasury kept China, Japan, Germany, South Korea
and Taiwan on the monitoring list though it said none of the six
countries met the standard for enhanced scrutiny under a new
trade enforcement law passed in 2015. 
    South Korean shares edged down with the Korea Composite
Stock Price Index (KOSPI) standing down 0.1 percent at
2,021.36 points.
    Offshore investors were set to be net buyers, purchasing
59.8 billion Korean won ($53.64 million) worth of KOSPI shares
near mid-session.
    Shares of LG Chem Ltd, South Korea's largest
chemical company, gained 1.3 percent after it said on Monday it
would spend 287 billion won to boost ethylene production at its
Daesan naphtha plant by 2019. 
    Automobile manufacturer Hyundai Motor Co rose
more than 1 percent.
    Decliners outnumbered advancers 513 to 272.
    December futures on three-year treasury bonds shed
0.11 point to 110.60. 
                       0223 GMT    Prev close
 Dollar/won             1,140.7       1,132.1
 Yen/won             10.9338/82       10.8964
 *KTB futures            110.60        110.71
 KOSPI                 2,021.36      2,022.66
 * Front-month futures on three-year treasury bonds

 (Reporting by Dahee Kim; Editing by Simon Cameron-Moore)

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