SEOUL: The South Korean won advanced to its highest against the greenback in nearly nine months early on Tuesday, lifted by a rally in the local stock market on hopes the US will avert a possible debt default.
The local currency was quoted at 1,068.2 per dollar as of 0205 GMT, up 0.3 percent from Monday's onshore close at 1,071.5.
The won rose as high as 1,067.5 shortly after markets opened its strongest since Jan. 24 this year.
The benchmark Korea Composite Stock Price Index was up 0.8 percent at 2,037.22 points after striking its highest point this year above the 2,040 level.
Local equities were boosted by top US senators signalling they may soon reach a deal to reopen the US government and raise the debt ceiling to cover US borrowing needs for now.
Market participants said local exporters and investors cutting dollar-long positions also helped push the won higher intraday.
"It looks like the won stands a good chance of reaching the early 1,060 range but the speed depends on the government," said a foreign bank dealer in Seoul, referring to the possibility of the government intervening to slow the won's rise.
South Korean foreign exchange officials have repeatedly issued warnings recently against excessive foreign capital inflows.
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