The South Korean won erased early losses on Monday but investors were cautious ahead of a two-day U.S. Federal Open Market Committee (FOMC) meeting starting on Tuesday.
The won was quoted at 1,166.8 per dollar as of 0253 GMT, barely changed from the previous close, after falling as low as 1,173.8 early in the session, its weakest since June 12, 2012.
“The won pared losses as overhanging supply was offloaded around the 1,173 level,” said Jung Sung-yoon, a foreign-exchange analyst at Hyundai Futures. Investors will be closely watching the Fed meeting for further clues on when it will start raising interest rates this year.
Meanwhile, South Korean shares edged down on concerns over earnings for the second quarter, with persistent foreign selling weighing on the main board.
The Korea Composite Stock Price Index (KOSPI) was down 0.3 percent at 2,039.40 points after falling to as low as 2,032.44, the lowest since July 13. Losers led gainers by 3.5 to 1.
“Investors are worrying about earnings in the broad markets except for some industries such as chemicals and securities,” said Lee Kyung-min, an analyst at Daishin Securities.
Lee noted large caps including Samsung Electronics and Hyundai Motor supported the main board on expectations that a recently weak won could help improve their exports.
Market heavyweight Samsung Electronics Co Ltd gained 0.7 percent and car maker Hyundai Motor Co Ltd rose 2.9 percent. Kia Motors, Hyundai Motor’s affiliate, rose as much as 6.1 percent to 44,350 won, the highest in three weeks.
“Kia’s earnings for the second quarter were in line with market consensus and the company has momentum for the mid- and long-term,” said Lee Sang-hyun, an analyst at IBK Securities.
Foreign investors were set to be net sellers for a seventh consecutive session. They offloaded 34.4 billion won($29.50 million) worth of KOSPI shares by midday.
September futures on three-year treasury bonds were up 0.04 points at 109.45.