The South Korean won hit a week's high against the dollar and its strongest in nearly a decade versus the yen on Friday as demand from exporters and higher local shares forced investors to clear dollar-long positions.
But sustained wariness over dollar-buying intervention by South Korea's foreign exchange authorities and heavy foreign selling in the Seoul stock market limited gains in the won.
The local currency is expected to stay around the level of 930 next week, as supports from exporter deals may be offset by intervention concern and importer deals, market players said.
The won was last quoted at 927.9/8.8 per dollar, the strongest bid since 926.1 on June 7, compared to its previous closing bid of 929.6. It rose 0.3 percent against the dollar for the week. The South Korean unit hit 7.5359 versus the yen, the highest since 7.4522 on October 24, 1997.
"Some market players had to clear their (dollar-long) positions, which they built on expectations of intervention, given the won's jump against the yen," said a foreign bank dealer.
Earlier, Cho Won-dong, South Korea's deputy finance minister said the country had not changed its stance of taking action if foreign exchange rates move abruptly. Actual dollar-buying by the authorities were not spotted, dealers said.
In the Seoul main stock market, foreign investors bought a net 49 billion won in shares helping the benchmark close at a record for a second consecutive day. They dumped a combined net 2.03 trillion won worth of shares over the last seven sessions, although currency dealers said supplies of won related to the sales were not as great as they had been expecting.
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