SEOUL: The South Korean won rose against the dollar on Monday as the greenback broadly fell after a G20 finance ministers' weekend agreement and heavy buying on the local stock market by foreign investors.
But investors remained wary of possible measures to check the won's strength, both dollar-buying intervention and regulations against hot money inflows.
Earlier, a senior government official said no currency values were purely determined by markets.
The local currency was expected to remain firm in anticipation of further quantitative easing by the Federal Reserve and a sustained appetite for assets in South Korea, analysts and dealers said.
But upward movement was seen slowing on persistent caution about measures by the foreign exchange authorities ahead of a key resistance line of around 1,113 per dollar, a 200-week moving average, they added.
"There is no doubt that the won's bullish trend will see it rise further along with other emerging currencies," said June Park, an economist at Woori Investment & Securities. "But the authorities of emerging countries including Korea will have to check the strength of their currencies, although they are unlikely to aggressively intervene. They need to maintain export competitiveness amid a slackening global economy."
The South Korean unit ended local trade up 0.6 percent at 1,116.3 versus the greenback from Friday's domestic close of 1,123.0. It strengthened to as firm as 1,115.3, minutes before the local market closed.
"The 1,110 level was expected. The G20 meeting reinforced appetite for (dollar) short positions, which had been weakened last week," a foreign bank dealer said.
On Saturday, the Group of 20 major economies agreed to shun competitive currency devaluations but stopped short of setting targets to reduce trade imbalances that are clouding global growth prospects.
IFR Markets quoted dealers as saying the Bank of Korea was suspected of having intervened below 1,117.
The won has gained 4.4% against the greenback so far this year, but it was still the second-worst performing Asian currency after the Chinese yuan.
Foreign investors bought a net 504.4 billion won (RM1.39 billion) worth of stocks on the main exchange after purchasing a net 556.8 billion won in the previous session.
The benchmark KOSPI closed up 0.97%. ' Reuters
But investors remained wary of possible measures to check the won's strength, both dollar-buying intervention and regulations against hot money inflows.
Earlier, a senior government official said no currency values were purely determined by markets.
The local currency was expected to remain firm in anticipation of further quantitative easing by the Federal Reserve and a sustained appetite for assets in South Korea, analysts and dealers said.
But upward movement was seen slowing on persistent caution about measures by the foreign exchange authorities ahead of a key resistance line of around 1,113 per dollar, a 200-week moving average, they added.
"There is no doubt that the won's bullish trend will see it rise further along with other emerging currencies," said June Park, an economist at Woori Investment & Securities. "But the authorities of emerging countries including Korea will have to check the strength of their currencies, although they are unlikely to aggressively intervene. They need to maintain export competitiveness amid a slackening global economy."
The South Korean unit ended local trade up 0.6 percent at 1,116.3 versus the greenback from Friday's domestic close of 1,123.0. It strengthened to as firm as 1,115.3, minutes before the local market closed.
"The 1,110 level was expected. The G20 meeting reinforced appetite for (dollar) short positions, which had been weakened last week," a foreign bank dealer said.
On Saturday, the Group of 20 major economies agreed to shun competitive currency devaluations but stopped short of setting targets to reduce trade imbalances that are clouding global growth prospects.
IFR Markets quoted dealers as saying the Bank of Korea was suspected of having intervened below 1,117.
The won has gained 4.4% against the greenback so far this year, but it was still the second-worst performing Asian currency after the Chinese yuan.
Foreign investors bought a net 504.4 billion won (RM1.39 billion) worth of stocks on the main exchange after purchasing a net 556.8 billion won in the previous session.
The benchmark KOSPI closed up 0.97%. ' Reuters
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