SEOUL: The South Korean won was pulled slightly higher by the local stock market rally on Tuesday, but remained trapped in a tight range as investors awaited the outcome of the US presidential election.
The local currency was quoted at 1,090.7 against the dollar at the end of onshore trade, compared with Monday's local finish at 1,091.2.
The Reserve Bank of Australia's (RBA) decision to hold its main cash rate steady at 3.25 percent on Tuesday also helped push the won slightly higher after the Australian dollar jumped half a cent after the decision.
Some in the market had been convinced the RBA would cut rates in the face of global economic uncertainty, and the decision to keep rates steady gave investors confidence to invest in some risky assets, dealers said.
"How the US presidential elections will affect the markets will be key, but the present view that the won will strengthen will remain strong as there is nothing significant enough to pull it down," said a local bank dealer in Seoul.
The benchmark Korea Composite Stock Price Index posted a daily gain of more than 1 percent as investors placed their bets on blue-chip stocks. Foreigners were net sellers of just 2.2 billion won ($2.02 million) worth of South Korean shares on Tuesday.
Local bonds gained as foreigners snapped up contracts, with December futures on three-year treasury bonds rising 0.08 points to 106.25.
The yield on the benchmark five-year treasury bonds shed 1 basis point, while the yield on three-year treasury bonds fell 2 basis points on Tuesday.
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