SEOUL: The South Korean won firmed to its highest in a month after comments from US Federal Reserve Chairman Ben Bernanke eased investors' concerns over the chance of an early reduction in the Fed's bond-purchasing programme.
The local currency was quoted at 1,124.6 against the dollar at 0305 GMT, up 1 percent from Wednesday's domestic close at 1,135.8.
The won surged to 1,124.0 shortly after markets opened, its strongest since June 10, although the won is down around 5 percent against the dollar this year.
The dollar fell against a basket of major currencies on Thursday after Bernanke said highly accommodative monetary policy would be needed for the foreseeable future.
"The dollar eased quickly onshore and overseas after the comments by Bernanke. We see very active trading by foreigners in the local stock market and expect investors to try to lift the won higher in midday trade," said a local bank dealer in Seoul.
But a dealer at a foreign bank in Seoul said it was too early to say whether foreigners were returning money back to South Korean markets in earnest, referring to the selloff in late June when the Fed signalled its plan to taper down its quantitative easing.
The benchmark Korea Composite Stock Price Index jumped 2.1 percent.
September futures on three-year treasury bonds were up 0.21 points to trade at 105.67.
Markets showed a muted reaction to the Bank of Korea's monetary policy decision on Thursday after it held interest rates steady for a second month, as widely expected.
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