1. South Korean won touches 11-week low, stocks slump

South Korean won touches 11-week low, stocks slump

The South Korean won touched over 11-week low early on Friday as investors backed away from emerging markets in the wake of a broad decline in global stock markets. South Korean bond sales by Franklin Templeton raised concerns over potential capital outlflows, putting further presure on the won.

By: | Published: June 30, 2017 9:45 AM
The won was trading down 0.3 percent at 1,144.4 as of 0220 GMT after touching 1,147.0, the lowest intraday level since April 12. (Image: Reuters)

The South Korean won touched over 11-week low early on Friday as investors backed away from emerging markets in the wake of a broad decline in global stock markets. South Korean bond sales by Franklin Templeton raised concerns over potential capital outlflows, putting further presure on the won. The won was trading down 0.3 percent at 1,144.4 as of 0220 GMT after touching 1,147.0, the lowest intraday level since April 12.

“Though the dollar index is showing further losses in global markets, the won seems to be responding more to strong risk-off sentiment and possibilities of additional monetary outflow from foreigners,” said Min Gyeong-won, a foreign exchange analyst at NH Futures. Min, however, did to expect the won to fall further during the session as investors were likely to be cautious ahead of a U.S.-South Korean summit.

In the summit, U.S. President Donald Trump will press South Korean President Moon Jae-in to solve trade differences over cars and steel focusing on the nuclear threat from North Korea. South Korean shares edged down after a big rebound on the previous day.

The Korea Composite Stock Price Index (KOSPI) was down 0.5 percent at 2,384.57 points. Offshore investors were set to be net sellers, offloading 119.5 billion Korean won ($104.45 million) worth of KOSPI shares near mid-session. The Tech shares sub-index lost 1.4 percent. Samsung Electronics dropped 1.4 percent and SK Hynix fell nearly 2 percent. Decliners outnumbered advancers 458 to 315. September futures on three-year treasury bonds gained 0.02 point to 109.29.

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