SEOUL: The South Korean won edged higher in domestic trade Thursday, but fell from its intraday highs on steady dollar demand from importers and banks' position adjustments.
The local currency was quoted at 1,073.0 against the dollar at the end of onshore trade Thursday, compared with 1,075.0 at the end of the Seoul session on Wednesday.
The won rose as high as 1,071.0, thanks to improved risk appetite following additional monetary stimulus announced by the US Federal Reserve. But dealers said importers continued buying dollars on lows and banks began short-covering on the US currency as well.
One local dealer said a foreign bank was continuing to buy dollars against the won and was likely to be building a position on the dollar's expected gains.
Dealers added that investors were reluctant to take big bets with the year coming to a close, with some already having closed their positions, suggesting that the won may trade in a narrow band for the rest of December.
"Some dealers would probably rather see the dollar-won exchange rate stop falling or even rise a little bit so they can position themselves aggressively early next year," said another currency dealer.
The benchmark Korea Composite Stock Price Index ended up 1.4 percent at 2,002.77. Foreigners were net buyers of 539.0 billion Korean won ($501.40 million) worth of local shares.
Local bonds fell, weighed by renewed risk appetite. December futures on three-year treasury bonds fell 0.08 points to 105.93.
Yields on the benchmark five-year treasury bonds and three-year treasury bonds each rose by three basis points from Wednesday's close.
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