SEOUL: The South Korean won firmed to a 14-month high against the dollar on Wednesday, as exporters sold the greenback while local authorities refrained from intervening to stem the currency's rise.
Adding to the positive sentiment was an announcement from Doosan Heavy Industries and Construction Co Ltd that it had won a $1.0 billion letter of award to build a desalination plant in Yanbu, Saudi Arabia.
The won ended its domestic trading session at an intraday high of 1,084.9 against the dollar, compared to Tuesday's close at 1,089.9. The closing level was the highest seen since Sept. 9 last year.
"Dollar sales from exporters have been steadily seen while no movement from the government (to curb the rally) pushed the won higher today," said a foreign bank dealer in Seoul.
South Korean exports are expected to look up towards the end of the 2012 after a dreary year as exports in October rose 1.1 percent from a year earlier, marking the first annual gain in four months.
Traders said low volatility also helped boost the boost the won currency as it encourages carry trade demand where investors borrow cheaply in
US dollars to invest in risky assets.
The benchmark Korea Composite Stock Price Index inched up 0.2 percent. Foreigners were net sellers of 75.1 billion won ($68.90 million) worth of South Korean stocks on Wednesday.
Bonds slipped as investors turned to riskier assets, encouraged by the positive data and comments from the central bank that the economy appears to have bottomed out.
December futures on three-year treasury bonds were down 0.04 points at 106.22.
Yields on the benchmark five-year treasury bonds and three-year treasury bonds both rose 1 basis point each.
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