SEOUL: The South Korean won ended lower in domestic trade Thursday, pulled down by renewed worries about whether the US can strike a deal to avoid a fiscal crisis and by offshore investors' dollar buying.
The local currency was quoted at 1,074.7 against the dollar at the end of onshore trade, compared with 1,072.8 at the end of the Seoul session on Tuesday. Korean markets were closed on Wednesday for the country's presidential election.
US President Barack Obama and the Republicans were locked in an escalating political conflict over how to avoid the so-called fiscal cliff, creating doubt that the two sides can reach a compromise before the year-end.
Dealers also said offshore players were seen buying the dollar throughout the session. One foreign bank dealer noted that a local importer also continued to buy dollars during Thursday's trade.
Some dealers said investors were also wary of further intervention by local foreign-exchange authorities to slow the won's climb against the dollar, and that wariness provided additional support for the US currency.
"With the local presidential elections over, I think it's still correct to assume that the dollar will continue to fall against the won; markets are now waiting to see how the local authorities react to this," one local bank dealer said.
The benchmark Korea Composite Stock Price Index ended up 0.3 percent at 1,999.50. Foreigners were net buyers of 244.9 billion won ($228.20 million) worth of local stocks.
Bonds edged up on bargain hunting, with the lead March futures on three-year treasury bonds ending up 0.06 points at 105.78.
Center>Copyright Reuters, 2012
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