SEOUL: The South Korean won fell on Tuesday as foreigners bought dollars ahead of a closely watched testimony by Federal Reserve Chair Janet Yellen to a US Senate committee later in the day.
The won was quoted at 1,024.6 to the dollar as of 0235 GMT, down 0.63 percent from Monday's domestic close at 1,018.2. It was poised for its worst intraday loss since February this year.
"The market currently anticipates US interest rates will be raised earlier than expected due to positive US economic indicators, but should Yellen say something unexpected, that will boost the dollar," said Hong Seok-chan, a currency analyst at Daishin Economic Research Institute.
Market participants said few dollar sales from local exporters were spotted in early trading, adding to the weakness in the won.
Meanwhile, South Korean shares rose early in the session, in line with Asian peers after US stocks ended higher overnight. Both foreigners and institutions snapped up local shares.
Global shares had risen on Citigroup's earnings and a boost in merger and acquisition activity in the US healthcare industry.
The Korea Composite Stock Price Index (KOSPI) had gained 0.87 percent to 2,011.29 as of 0235 GMT, up from 1,993.88 at yesterday's onshore close.
"Yellen's testimony tonight will have a considerable impact on shaping the basic frame of future dollar movements and stock movements as the effect will be widespread," said Cho Byung-hyun, an analyst at Tong Yang Securities.
Samsung C&T Corp gained 1.5 percent after announcing it had won a $678 million order to build integrated cultural facilities for a Dhirubhai Ambani International Convention and Exhibition Centre (DAICEC) project in Mumbai from Reliance Industries Ltd.
Samsung SDI also recovered from Monday's losses, advancing by 1.5 percent, as German premium automaker BMW announced plans to increase orders of electric vehicle battery cells by at least 20 to 30 percent from its exclusive supplier in 2016.
Korea Line Corp, a marine transportation service provider, added 0.7 percent after winning a 307 billion won shipping contract from SNNC Co Ltd, expected to last until the end of 2035.
Lead September futures on three-year treasury bonds edged up by 0.03 point to 106.77.
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