* Fed meeting takes headline in local stocks, won
* Won touches the lowest level since June 5
SEOUL, June 17 The South Korean won edged
lower against the dollar early on Tuesday and appeared headed
for a fourth day of losses as insurgency in Iraq dented
sentiment for riskier assets, while much of the focus shifted
towards the two-day U.S. Federal Reserve meeting.
The won was quoted at 1,022.3 against the dollar
as of 0230 GMT, down 0.2 percent from Monday's onshore close at
It traded as low as 1,022.7 per dollar, the weakest intraday
level since June 5.
"Trading is quiet across the board before the Fed meeting,"
said a currency dealer at a domestic bank, before adding, "the
key is whether rate hike worries will re-emerge rather than the
decision over another round of stimulus unwinding."
The broad risk-averse sentiment weighed on the won, but
demand by exporters kept its weakness in check, dealers said.
The Fed is expected to announce a further cut to its monthly
bond purchasing program, but is not seen raising interest rates
The Korea Composite Stock Price Index (KOSPI) was
up 0.2 percent at 1,997.23 points as of 0230 GMT.
"It's apparent that offshore investors are waiting for the
Fed meeting results as they exercise caution, but an unexpected
move or a hawkish comment appear unlikely from the meeting as
there are question marks regarding the U.S. growth outlook,"
said Kwak Hyun-soo, a market analyst at Shinhan Investment Corp.
The International Monetary Fund cut its growth forecast for
the United States on Monday and said the economy would not reach
full employment until the end of 2017, which may allow interest
rates to be held near zero for longer than financial markets
Offshore investors sold a net 23.2 billion won ($22.79
million) worth of KOSPI shares by near the mid-session, while
domestic institutional and retail investors positioned as net
buyers, picking up a combined 27 billion won of shares.
Auto shares gained some momentum as the won's appreciation
was put to a halt, with Hyundai Motor Co and Hyundai
Mobis Co Ltd rising 0.9 percent and 2.5 percent,
A stronger won translates into weaker price competitiveness
against Japanese rivals for local exporters including auto
companies in overseas markets.
World's largest handset maker Samsung Electronics Co Ltd
inched down 0.7 percent while steelmaker POSCO
slipped 1.2 percent.
0230 GMT Prev close
Dollar/won 1,022.3 1,020.1
Yen/won 10.0255/176 10.0137
*KTB futures 106.37 106.37
KOSPI 1,997.23 1,993.59
* Front-month futures on three-year treasury bonds
($1 = 1017.8000 South Korean Won)
(Reporting by Jungmin Jang; Editing by Kim Coghill)