SEOUL: The South Korean won and stocks fell on Monday morning as uncertainty grew over the timing of a U.S. Federal Reserve rate hike as Fed officials kept the door open to a September hike – defying recent turmoil in financial markets.
The South Korea won was down 0.8 percent at 1,182.9 per dollar as of 0222 GMT, set to break a four-day gaining streak. For the month, the won has lost more than 1 percent, poised to extend its losing streak to a fourth consecutive month.
“Market participants expect that Fed may raise rates in September, while keeping cautiously an eye on a key U.S. jobs report which can give clues of the exact timing of the hike due later in the week,” said Yuna Park, a foreign-exchange analyst at Dongbu Securities.
She noted local exporters’ demands for month-end settlements would limit the won’s losses.
Federal Reserve Vice Chair Stanley Fischer said the U.S. central bank can’t wait for the case on hiking interest rates to be overwhelming. But he was undecided whether to raise rates in September.
On the local stock market, the South Korea Composite Stock Price Index (KOSPI) was down 0.5 percent, set to break a four-consecutive-session gaining streak. On a monthly analysis, it lost almost 5 percent, poised to mark a biggest monthly drop since June, 2013.
“The main board can move with higher volatility and foreign selling in local equities can last ahead of the Federal reserve Open market Committee in the next month,” said Lee Jae-hoon, a stock-analyst at Mirae Asset Securities.
