SEOUL: The South Korean won edged higher in domestic trade on Tuesday, touching a near four-week high on the back of local stock gains and bets that the US Federal Reserve will not taper its stimulus in the near term
The local currency was quoted at 1,056.0 against the dollar as of 0210 GMT, compared with Monday's domestic closing level of 1,057.9. It traded as high as 1,055.4, the strongest since Oct. 24.
The dollar was broadly weaker in early Asian trade Tuesday as investors bet that Janet Yellen, nominee to succeed outgoing Fed Chairman Ben Bernanke, will retain an accommodative policy stance and would not be looking to start reducing the central bank's bond purchases until early next year.
But the extent of won strength was limited as investors are wary of potential dollar-buying intervention from local authorities to curb the won's gains. The currency is not far from the year-to-date high of 1,054.3 and is up around 0.7 percent against the dollar so far this week.
"The market is biased towards dollar-won heading lower, but concerns about potential intervention is preventing investors from trading aggressively," a currency dealer said. "Given the current volume, I don't think the won will be setting a new 2013 high."
The benchmark Korea Composite Stock Price Index was up 1 percent at 2,030.63.
December futures on three-year treasury bonds were up 0.06 points at 105.67, tracking positive leads from US Treasuries.
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