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S.Korea won extends slide as dollar stands tall, stocks edge up
December 21, 2016 / 2:42 AM / a year ago

S.Korea won extends slide as dollar stands tall, stocks edge up

* Won loses further ground as dollar solid near 14-year
high, kospi up
    * S.Korea fx official cautions traders about pushing won too

    SEOUL, Dec 21 (Reuters) - The South Korean won 
extended its slide early on Wednesday, capping the fifth session
of losses on the back of a relentless dollar rally fuelled by
yield-allure as investors bet on U.S. growth and interest rates
moving to a higher gear. 
    The won was fetching 1,194.9 as of 0200 GMT, down
0.13 percent compared to Tuesday's close of 1,193.4.
    The currency remained on the back foot even after a
government official in charge of foreign exchange markets
cautioned traders about pushing it too low. 
    "Market (investors) would be cautious near the 1,200 won
level," a FX official said earlier in the day, in a sign
authorities stand ready to intervene on any excessive moves. 
    The 1,200 mark has not been breached since March this year. 
    The U.S. Federal Reserve's signal this week of a quicker
pace of interest rate increases next year, along with a boost in
dollar demand from South Korean importers, are adding to the
pressure on the won, analysts say. 
    "Importers' dollar demand is big as the dollar is expected
to continue its rally," said Ha Keon-hyeong, a foreign exchange
analyst at Shinhan Investment Corp.
    He said the currency is likely to touch the 1,200 level,
though it may not retain those levels for too long given the
threat of intervention to stem any one-sided movements.
    South Korean shares edged up to over a two-month intraday
high thanks to a robust Wall Street. 
    The Korea Composite Stock Price Index (KOSPI) was up
0.21 percent at 2,046.15 points. It touched 2,053.46 earlier in
the session, its highest level since October 11, 2016.
    Offshore investors were set to be net buyers, purchasing
59.8 billion Korean won  ($50.05 million) worth of KOSPI shares
near mid-session. 
    Decliners outnumbered advancers 419 to 360. 
    March futures on three-year treasury bonds rose 0.07
points to 109.36. 
                       0200 GMT    Prev close
 Dollar/won             1,194.9        1193.4
 Yen/won                10.1469       10.1061
 *KTB futures            109.36        109.28
 KOSPI                 2,046.15      2,041/94
 * Front-month futures on three-year treasury bonds

($1 = 1,194.9000 won)

 (Reporting by Dahee Kim; Editing by Shri Navaratnam)

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