SEOUL: The South Korean won edged down on Wednesday morning, as traders were wary of further government intervention to curb the won's recent gains after some dollar-buying was suspected on Tuesday.
The local currency was quoted at 1,075.2 against the dollar as of 0200 GMT, down 0.2 percent from Tuesday's onshore close at 1,075.4.
Early trade was characterized by caution as the finance ministry recently warned it is watching markets closely for volatility in the won against the dollar.
On Tuesday, foreign exchange authorities were suspected to have bought dollars near the 1,074 level.
Market participants said they expected it would be difficult for the won to rise above the 1,070 level in the near term due to the threat of intervention.
Traders expect the won to find resistance somewhere between 1,078 and 1,080.
"The won's losses today indicate the government bought a considerable chunk of dollars yesterday, as there are no special events or catalysts today," said a foreign bank dealer in Seoul.
There also appeared to be some dollar short-covering pressuring the won before South Korean markets close for a public holiday on Thursday, traders said.
The South Korean stock market held steady as investors were quietly confident that the first partial US government shutdown in 17 years would be a brief affair.
The benchmark Korea Composite Stock Price Index was nearly flat at 2,000.02 points.
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