SEOUL: The South Korean won fell to a 5-1/2 month low against the dollar on Monday, as the greenback surged on data pointing to robust economic growth.
The dollar touched a fresh four-year high against a basket of currencies.
The won was trading at 1,049.2 to the dollar as of 0130 GMT, its lowest level since April 8. It closed Friday's onshore trading session at 1,044.4.
Data on Friday showed the US economy expanded at its fastest growth pace in 2-1/2 years during the second quarter, in a bullish signal for the remainder of the year.
"A strong dollar and a weak yen are double trouble for South Korean exporters, and worries over their contagion effect on earnings have prompted foreign investors to repatriate their investments, providing more downdraft for the won," said Hong Seok Chan, an analyst at Daishin Economic Research Institute.
Finance Minister Choi Kyoung-hwan said on Monday that a weak yen as well as other overseas risk factors must be closely monitored, cautioning that the economy must be spurred on to preserve its momentum.
South Korean shares stuck to a tight range on Monday as the strong data from the U.S was offset by divergent fortunes in China, South Korea's largest export destination.
The Korea Composite Stock Price Index (KOSPI) was down 0.02 percent at 2,031.25 points as of 0130 GMT.
China said profits at industrial companies fell 0.6 percent in August from a year earlier, the latest in a series of weak data from the world's second-largest economy.
Shares sensitive to Chinese demand conditions such as shipbuilders and steelmakers were the highlight underperformers on Monday morning, as POSCO slid 3.2 percent while Daewoo Shipbuilding & Marine Engineering fell 3.4 percent.
Exporters were also feeling the heat of increased competition from Japanese firms, South Korea's main trade rivals, as the yen dipped to a six-year low against the dollar.
"The strength of the won against the yen could be stymied if the Bank of Japan stays its course while its South Korean counterpart produces further easing measures this month," said Kim Seung-hyun, a senior market analyst at Daishin Securities.
Chipmaker SK Hynix bucked wider trends to climb 3 percent, with analysts citing healthy forecasts in the DRAM market, bolstered by substantial demand from Apple.
"Despite all the noise regarding its shortcomings, iPhone 6 sales have already passed the 10 million mark and showing little signs of losing steam, which will create plenty of memory chip demand for the rest of the year" said Lee Sae-chul, an analyst at Woori Investment & Securities in a note to clients.
September futures on three-year treasury bonds fell 1 basis point to trade at 107.52.
Comments
Comments are closed for this article.