Korean won down vs dollar for 3rd day to trade at 20-month low

The South Korean won sank to the lowest level in 19 months against the U.S. dollar Wednesday, falling for a third consecutive day as it tracked a decline in the Japanese yen to the greenback, dealers said.

The local currency closed at 1,126.50 per dollar, down 3.9 won from the previous session's end. The won hit an intraday low of 1,129.60 won at one point, the lowest level since July 10, 2013 when it finished at 1,135.80 won.

The Japanese currency continued to fall against the dollar as traders bet that the U.S. Federal Reserve would raise interest rates sooner than thought and weak growth data for the fourth-quarter stoked speculation that the Japanese central bank may take additional monetary easing.

South Korea's won usually tends to move in lockstep with the yen as the two countries directly compete in overseas markets over products ranging from autos to smartphones.

"The won-dollar rate may rise further as the rate breached psychologically resistant levels," said Jun Seung-ji, an analyst at Samsung Futures Co.

The Bank of Korea, the country's central bank, is scheduled to hold its monthly monetary policy meeting Thursday where it is widely expected to hold its base rate at a record low of 2 percent.

But the central bank is coming under growing calls to slash the base rate, which will put further downward pressure on the local currency, traders said.

The country's key stock index, the KOSPI, shed 3.94 points or 0.2 percent to end at 1,980.83, also falling for a third straight day.

Meanwhile, the won-yen cross rate stood at 928.46 as of 3:00 p.m.(Yonhap)