SEOUL: The won was slightly weaker on Wednesday morning, on dollar demand following suspected intervention by South Korean foreign exchange authorities the previous session.
The local currency was quoted at 1,025.9 against the dollar as of 0235 GMT, compared with Tuesday's onshore close at 1,025.3.
"It's unclear whether the authorities are interveneing today, but dollar bids are strong. There is talk of dollar buying from state-run companies and pension funds while exporters' won-demand is at average levels," said a currency dealer.
South Korean foreign exchange authorities were spotted intervening in markets on Tuesday to stem the won's strength. The local currency has appreciated 3.8 percent against the dollar this quarter.
Upside pressure remains heavy, however, as dealers and analysts point out that the market is approaching the month-end settlement period for exporters amid weakening dollar momentum.
"The previous intervention bought time for the market to digest dollar-selling by exporters. This time appears to be no different with no variables to trigger dollar-long positions," wrote Woori Futures' analyst Son Eun-jeong in a note to her clients.
Local stocks erased earlier losses to hold ground, with the Korea Composite Stock Price Index (KOSPI) up 0.2 percent at 2,014.83 points as of 0240 GMT.
"In the absence of market moving variables, the index is left in the hands of foreign net inflows, which have been running in on bets that the European Central Bank will announce policy easing in June," said Kwak Hyun-soo, an analyst at Shinhan Investment Corp.
Foreign investors purchased a net 65 billion won ($63.4 million) worth of KOPSI shares to underpin the market. Foreigners positioned as net buyers for a sixth session by Tuesday, bringing total inflows to 1.8 trillion won during the period.
Investors are eyeing the US Federal Reserve's latest minutes due later in the global day for further clues on the timing of a future interest rate hike.
Naver Corp, the country's biggest search portal operator, rose 2.8 percent while steelmaker POSCO gained 1.1 percent.
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