The South Korean won marginally gained in early trade on Wednesday as investors awaited the U.S. central bank's policy decision on interest rate expected later in the day.
The South Korean won marginally gained in early trade on Wednesday as investors awaited the U.S. central bank’s policy decision on interest rate expected later in the day. Some market participants expect the local currency to be resilient even if the Federal Reserve raises interest rates as focus is shifting to the upcoming presidential election. South Korea is to hold presidential election by May 9 after former president Park Geun-hye was dismissed from office last week due to a political influence-peddling scandal.
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The won stood at 1,147.5 against the dollar, slightly firmer from Tuesday’s close of 1,148.8. Strong U.S. job growth and rising wages are seen as the green signal for the Fed to raise interest rates despite slowing economic growth. The key focus for now would be Fed Chair Janet Yellen’s comments at the press conference following the policy meeting, said Paik Seok-hyun, a foreign exchange analyst at Shinhan Bank. “Her comments will probably be in range of investors’ expectations and perhaps even push the won up slightly as they are unlikely to be very hawkish,” Paik added. South Korean shares edged down after a recent rally with the Korea Composite Stock Price Index (KOSPI) standing at 2,128.64 points, down 0.2 percent from the previous close. Offshore investors were net sellers of KOSPI shares by mid-session, snapping a seven-day buying spree. The advance-decline ratio was negative with losers outnumbering gainers 559 to 232. Shares of Samsung C&T rose 1.4 percent while SK Hynix shed 2.5 percent. March futures on three-year treasury bonds lost 0.03 point to 109.35.