SEOUL: The South Korean won edged lower in domestic trade on Tuesday, snapping a two-day winning streak amid dollar bargain-hunting by local banks emboldened by lacklustre performance from local stocks and the euro.
The local currency was quoted at 1,118.3 against the dollar at the end of onshore trade, down from 1,116.0 at the end of Seoul hours on Monday.
Dealers said the won was consolidating after rallying following additional monetary stimulus announced by the US Federal Reserve on Thursday. Foreign inflows into the stock market also eased, weighing further on the local currency.
"Today's market can be described in one word: correction," a foreign bank dealer said, adding that steady dollar demand throughout the session contributed to the won's decline.
Some dealers said the market saw some foreign capital outflows as investors cashed in recent profits from the bond market.
The benchmark Korea Composite Stock Price Index ended up 0.1 percent at 2,004.96. Foreigners were net buyers of 49.0 billion won ($43.91 million) worth of local shares on Tuesday.
Local bonds rebounded on bargain-hunting as appetite for riskier assets eased.
September futures on three-year treasury bonds, which expired today, rose 0.13 points to 106.00. December futures on the debt, which will replace the September contracts as the front-end contracts, rose 0.10 points to 105.97.
Yield on the benchmark five-year treasury bonds fell three basis points from Monday's close, while the yield on the three-year treasury bonds fell four basis points.
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