SEOUL: The South Korean won fell in volatile domestic trade on Thursday, declining for the second consecutive day as renewed risk aversion and the weak stock market triggered dollar short-covering.
The local currency was quoted at 1,124.0 against the dollar at the end of onshore trade, down 0.5 percent from Wednesday's domestic closing level of 1,118.5.
The won traded as high as 1,118.2 at midday as investors unwound dollar-long positions, but concerns about global growth and weak demand weighed on stocks and overall investor sentiment, pushing the won higher.
Dealers said continued repatriation of dividend payments by foreign investors supported the dollar while offshore investors were also covering their dollar-short positions, weighing on the local currency.
"The dollar-won rose to around 1,140 levels then fell sharply to 1,110, so I think the market may consolidate somewhere in the 1,120s," one dealer said. "But I don't think it will be easy for the exchange rate to fall in the near term given how the local stock market and the domestic economic conditions are as of late."
The benchmark Korea Composite Stock Price Index ended down 1.2 percent at 1,900.06. Foreigners were net sellers of 233.2 billion won ($208.50 million) worth of local shares on Thursday.
Local bonds rose on renewed risk aversion and foreign inflows. June futures on three-year treasury bonds ended up 0.12 points at 106.82.
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