South Korean won at 2007 high

The South Korean won on Monday hit its highest point against the dollar this year, helped by expectations of greater won demand from exporters such as shipbuilders, which kept winning big foreign orders. The won is expected to rise further as the country's exports grew faster than expected in June, helping South Korea notch a record monthly trade surplus.
The currency's gains increased caution over dollar-buying intervention by South Korea's foreign exchange authorities, while continuous foreign selling in the Seoul stock market capped rises in the won. But authorities did not appear to be buying dollars to check the won's strength, forcing market players to clear dollar-long positions to cut losses, dealers said.
The won was last quoted at 921.5/1.8 per dollar, compared to its previous closing bid of 923.5. It briefly touched 921.3, the strongest since December 18, 2006. "Exporters are more likely to chase the won now that they see the government didn't take action even though the currency hit its high for the year," said a foreign bank dealer.
"It is better to wait to sell the won after confirming intervention by authorities." On Monday, South Korean data showing June exports beat forecasts and a Finance Ministry official's upbeat remark on economic growth reinforced expectations that interest rates will be raised next week.
An economic research unit of the state-run Korea Development Bank expects the won to rise to around the average level of 915 per dollar in the second half, led by strong exports and a possible interest rate increase by the Bank of Korea.
Authorities were unlikely to take steps to cap won's rise as exports, a major engine of growth in Asia's fourth-largest economy, remain healthy despite a firmer won, some dealers said.
"The government has little justification for intervention due to solid exports, and some exporters are reluctant to buy the won while it is at its strongest this year," said a local bank dealer. Still, a flurry of foreign orders for ships and plants had market players predicting more demand for the won will emerge. Among those winning orders:
Hyundai Heavy Industries Co Ltd, the world's top shipbuilder, said it had won a 722.4 billion won container ship order from Panama. Affiliate Hyundai Mipo Dockyard Co Ltd said it had secured foreign ship orders worth a total of $900 million.
Samsung Heavy Industries Co Ltd said it had recently won ship orders that totalled $1.2 billion from companies in the Americas. GS Engineering and Construction Corp said it has won an order worth $185 million to build a plant in Thailand.
In Seoul's main stock market, foreign investors sold a net 104.7 billion won in shares, while the benchmark KOSPI ended up 1.59 percent. Foreigners dumped a net 3.54 trillion won in shares in June. The yen was at 122.76/79 per dollar versus 123.15/18 in late New York trade on Friday.