SEOUL: The South Korean won fell early on Wednesday, stung by a strong US dollar while reports that Russian troops were massing near the Ukraine border pushed investors away from riskier assets.
The local currency was quoted at 1,034.9 against the dollar as of 0205 GMT, down 0.6 percent from Tuesday's onshore close at 1,028.2.
The dollar hit its highest against a basket of currencies since last September on positive US sector data as well as factory orders in July, signalling improvement in the economy.
"The won will likely meet its intraday low around 1,035 and exporters are likely to step in with their dollar sales if the won sags quickly, capping losses," said Hong Seok-chan, an analyst at Daishin Economic Research Institute.
South Korean stocks were also weighed down by escalating tensions in Ukraine but profit-taking kept losses in check, as the Korea Composite Stock Price Index (KOSPI) traded down 0.1 percent at 2,064.51 points by midday.
Market heavyweight Samsung Electronics Co Ltd was down more than 1 percent, while SK Hynix Inc dropped more than 4 percent.
Posco was up around 1 percent while LG Electronics gained roughly 3 percent on reports of its bigger share in the North American smartphone market, thanks to its latest handset models.
Retail investors weighed down the bourse, selling a net 24.2 billion won ($23.40 million) worth of KOSPI shares near mid-session, while foreigners were net buyers of 23.6 billion won worth.
Decliners outnumbered advancers 450 to 338.
The KOSPI 200 benchmark of core stocks was down 0.3 percent, while the junior KOSDAQ edged down 0.1 percent.
September futures on three-year treasury bonds fell 0.04 points to trade at 106.93.
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