SEOUL: The South Korean won rose to its strongest level in nearly six years early on Monday, playing catch-up to global markets from easing policy by the European Central Bank while concerns about official intervention tempered further gains.
South Korean financial markets were closed on Friday for Memorial Day.
The local currency was quoted at 1,017.5 against the dollar as of 0245 GMT, up 0.3 percent from Thursday's onshore close at 1,020.5. The won hit an intraday high of 1,017.0 per dollar, the strongest level since Aug. 7, 2008.
"Suspected dollar bids by local authorities attempted to weaken the USD/KRW pair's below the 1,020, but took a step back on robust dollar-selling offers," a currency trader at a local bank said. "The dollar-short flow appears to be heavy with offers accruing from a long weekend."
The European Central Bank cut rates on Thursday and will pump in money in an effort to steer the bloc away from the economic quicksand of deflation, promising to do more if all this is not enough.
Meanwhile, the yen-won cross touched its weakest level in nearly six years, giving more cause for the local authorities to adopt dollar-buying intervention to curb the won's strength.
Local authorities may purchase dollars to indirectly curb the yen's fall against the won, as the won does not trade directly against the yen.
The bid rate on the yen-won cross touched a low of 9.9084 on Monday, its weakest since Sept. 9, 2008. The cross rate was bid at 9.9181 as of 0245 GMT.
In the stock market, the Korea Composite Stock Price Index (KOSPI) was down 0.1 percent at 1,993.44 points as of 0258 GMT.
The risk-on sentiment stemming from upbeat economic indicators around the globe was offset by profit taking in the units of Samsung Group.
China's exports gained steam in May thanks to firmer global demand, data showed on Sunday. Meanwhile, data on Friday showed US employment had returned to its pre-recession peak in May with a solid pace of hiring.
The upbeat results from South Korea's three major export markets prompted extended capital inflows from offshore investors, with foreign investors purchasing a net 60 billion won ($59 million) worth of KOSPI shares near mid-session.
Foreigners have positioned as net buyers for 17 consecutive sessions through Thursday, bringing in nearly 3.1 trillion won during their buying spree.
Market bellwether Samsung Electronics Co Ltd fell 1.9 percent as investors locked in gains after posting the best monthly performance in May since December 2012.
Affiliate Samsung C&T Corp plunged 6.2 percent following a 12.6 percent rise last month.
Steelmaker POSCO rose 2.1 percent while crude oil refiner SK Innovation Co Ltd advanced 3.9 percent.
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