SEOUL: The South Korean won rose to a 14-month high against the dollar on Wednesday, as news that US President Barack Obama has been re-elected for a second term reassured investors that the country's quantitative easing program will likely continue.
The won was quoted at 1,085.4 to the dollar at the end of onshore trade, the strongest since September 2011. It had closed at 1,090.7 on Tuesday.
"The Fed's quantitative easing had been a driver in the won's recent appreciation, and the currency will likely continue strengthening with Obama re-elected," a bank dealer said.
Dealers said local foreign exchange authorities intervened during Wednesday's trading to slow the won's appreciation after the currency strengthened beyond the 1,090 resistance level.
One dealer said the market remains wary of the risk of further market operations by the Bank of Korea or the government to stem the won's rise.
South Korean finance ministry officials told Reuters that Obama's re-election appears to have cleared fears about a sudden change in US macroeconomic policy. But they also voiced concerns about risks of rapid foreign capital flows and exaggerated exchange-rate volatility stemming from the US monetary easing.
The benchmark Korea Composite Stock Price Index ended up 0.5 percent at 1,937.55. Foreigners were net buyers of 121.5 billion won ($111.40 million) worth of local shares on Wednesday.
Bonds were flat as investors assessed market prospects following Obama's re-election. December futures on three-year treasury bonds closed at 106.25, unchanged from Tuesday.
Yields on the benchmark five-year treasury bonds and the three-year treasury bonds were also unchanged from Tuesday.
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