Won dips 1.8 pct to dollar amid stock losses

SEOUL, May 14 (Yonhap) -- The South Korean currency fell 1.83 percent against the U.S. dollar Thursday as offshore investors dumped local stocks amid lingering woes over the slowing global economy, dealers said.

The local currency closed at 1,267.2 won to the dollar, down 23.2 won from the
previous session and marking its third straight session of decline.
"Investors' risk appetite receded after bleaker U.S. retail sales data raised
doubts about a quick recovery of the global economy," said Jeon Seung-ji, a
currency analyst at Samsung Futures Inc. "Foreign investors also unloaded local
stocks, putting downward pressure on the won."
The won's weakness comes as the country's key stock index declined 2.37 percent
to 1,380.95. Foreign investors sold a net 68.4 billion won (US$54 million) worth
of Seoul stocks on the main bourse.
The won's losses also come amid caution against possible intervention by foreign
exchange authorities to stem the won's sharp gain in recent sessions.
Finance Minister Yoon Jeung-hyun said Wednesday that the Korean unit's gain is
feared to hurt corporate profitability, which market players interpreted as a
potential move to step in the market.
The Korean currency has rapidly gained strength to the greenback as local banks
are making efforts to borrow overseas and the country's trade balance is
improving. But the won's sharp gains make prices of Korean products expensive in
overseas markets, sapping demands for the country's goods.
"Given rising signs of an economic turnaround, the Korean currency may rise to
the 1,100 won level to the dollar temporarily in the near term if the global
stock markets gain momentum," Jeon said. "But the Korean unit may not sustain
that level so long and there is a chance for the won to fall."