SEOUL: The South Korean won inched higher in early domestic trade on Monday, touching an 8-1/2 month peak on dollar-selling by offshore investors despite worries about potential intervention by the local authorities to curb the won's rise.
The local currency was quoted at 1,069.4 against the dollar as of 0247 GMT, compared with Friday's domestic close of 1,070.3. It traded as high as 1,068.5 in early morning trade, the strongest since Jan. 24.
Dealers said offshore players were seen selling the dollar against the won, pushing the local currency higher even as investors remain wary of dollar-buying intervention.
Dealers suspected the local authorities may have bought between $500 million and $1 billion in dollars on Friday in a bid to limit the won's gains. Some dealers suspected that they stepped in again on Monday but on a limited scale, which allowed the won to inch higher.
"I think the local authorities may have returned to the sidelines with the offshore players selling the dollar," said a dealer at a local bank.
Local policymakers remain concerned about the won's rise, with the currency having recorded its best month against the dollar in nearly two years in September.
Although dealers say South Korea's strong economic fundamentals will remain in the won's favour, they expect the local authorities to try to slow the currency's pace of appreciation to preserve price competitiveness for exporters.
The benchmark Korea Composite Stock Price Index was down 0.1 percent at 1,994.73.
December futures on three-year treasury bonds were down 0.05 point at 105.85, tracking weak leads from US treasuries.
Comments
Comments are closed for this article.