The South Korean won fell 1 percent to a 1-week low against the dollar on Monday as the US unit rallied over the weekend and as Seoul's main stock market turned weaker on renewed concerns about tensions with North Korea. The won ended local trade at 1,252.3/2.5 per dollar after falling to as low as 1,255.9, its weakest since June 1, compared with Friday's domestic close of 1,243.0.
The Seoul stock market's benchmark KOSPI wiped out an early 1.2 percent gain to close down 0.1 percent on concerns the results of North Korea's trial of two US journalists could raise tensions further on the peninsula.
"Stocks (in Seoul) retreated after the North Korean news and this in turn put a dent in the won, although dollar sales by export companies provided a floor," said a foreign bank dealer. North Korea, which was already facing UN sanctions for last month's nuclear test, on Monday ruled two US journalists were guilty of a "grave crime" and sentenced them to 12 years of hard labour.
But the impact from the news on the local currency and stock markets was relatively limited, with foreign share investors remaining net buyers on the main stock exchange. Currency traders said the outlook for the won would rely more on the US and international reaction to the North Korean move and on the global financial markets overnight.
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