SEOUL: The South Korean won was nearly flat in domestic trade Wednesday, recouping initial losses on dollar selling by exporters and offshore players as investors waited to hear what the US Federal Reserve says after its policy meeting.
The local currency was quoted at 1,130.8 against the dollar at the end of onshore trade, little changed from Tuesday's domestic close of 1,131.1.
The won traded as low as 1,135.8 against the US currency, tracking the dollar's overnight gains against the yen and declines for Korean stocks.
But dealers said the local currency rebounded around lunchtime as offshore players started selling the dollar, and some exporters looked to sell the US currency at its highs.
"Some domestic players who were long on the dollar also adjusted their position, extending the dollar-won rate's decline," a foreign bank dealer said.
Investors hoped the Fed would be giving fresh clues on whether it plans to start tapering its massive monetary stimulus before year-end.
A wind-down of the US quantitative easing programme will likely strengthen the dollar against local currencies and push global market rates higher, presumably putting pressure on markets such as South Korea. But the timing of such a move remains certain.
"Offshore players likely needed to cut some of their dollar-long positions, given the uncertainty about the Fed meeting," another foreign bank dealer said.
The benchmark Korea Composite Stock Price Index ended down 0.7 percent at 1,888.31. Foreigners were net sellers of 128.3 billion won ($113.43 million) of local shares.
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