SEOUL: The South Korean won was firmer on Tuesday morning as investors covered short positions in the currency, consolidating recent gains in the dollar which has climbed on expectations of an early rate hike by the US Federal Reserve.
The won was quoted at 1,113.1 to the dollar as of 0145 GMT, compared to Monday's closing rate of 1,117.7, pulling away from a 15-month intraday low of 1,121.7 seen in the previous session.
The won found further relief as the Japanese yen rebounded from a string of 7-year lows, tempering worries of intervention by financial authorities who have repeatedly stressed that a weak yen is a danger for South Korean exporters.
The yen/won cross rate was holding nearly steady at 9.2166, hovering just above a six-year low.
"The yen is oversold, especially given that there have been positive signals such as Japan's current account surplus coming in at more than double the initial forecasts," said Hong Seok-chan, an FX strategist at Daishin Economic Research Institute.
"The dollar may still be on the uptrend, but consolidation
is unavoidable given that it's trading at historical levels versus the yen," he said.
Foreign inflows into local equity markets also supported the won, with offshore investors buying a net 16.4 billion won ($14.73 million) worth of shares on the main bourse.
Foreigners have been net buyers in the KOSPI for seven straight sessions, having gobbled up a net 610 billion won ($548 million) worth during the stretch.
South Korean shares however, drifted lower on Tuesday as energy and shipyard counters were slammed when oil prices fell sharply to new five-year lows on expectations of a prolonged supply glut.
The Korea Composite Stock Price Index (KOSPI) was down 0.31 percent at 1,972.85 points as of 0145 GMT.
SK Innovation, South Korea's largest refiner, fell 1.9 percent while Daewoo Shipbuilding & Marine Engineering slid 4 percent.
Falling oil prices were a boon to airline shares however, on the prospects of cheaper jet fuel. Korean Air, South Korea's flag carrier, climbed 2.9 percent while Asiana Airlines rose 2.1 percent.
Shares in Korea Electric Power Corp (KEPCO) gained 1.8 percent after it raised $190 million from the sale of its remaining 4.4 percent stake in LG Uplus on Monday.
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