S. Korea won records biggest daily gain in more than 2 months

PHOTO: S. Korea won records biggest daily gain in more than 2 months

SEOUL - The South Korean won gained the most in more than two months against the dollar on Monday as investors adjusted long positions on the greenback built up due to the tensions on the peninsula.

A firmer yen against the dollar also helped bolster the won as concerns over the competitiveness of South Korea's exports eased somewhat.

The won was quoted at 1,120.5 against the dollar at the end of onshore trading, compared with 1,129.1 on Friday. The won was up 0.8 per cent against the dollar for the day, marking the sharpest daily rise since February 4.

Traders said that a lack of major developments from North Korea, despite recent concerns about another missile launch, appeared to trigger unwinding of bets against the local currency.

Investors are closely watching the yen-won rate on speculation that local authorities could intervene to protect exporters' price competitiveness, should the won continue to appreciate against the Japanese counterpart.

But the yen strengthened against the won during Monday's trade, easing fears about potential action from local authorities.

"The stock market pared its initial losses and the dollar fell against the yen, adding upwards pressure for the local currency," one local bank dealer said.

The benchmark Korea Composite Stock Price Index ended down 0.2 points at 1,920.45. Foreigners were net sellers of 121.6 billion won (S$133.15 million)worth of local shares on Monday.

Bonds edged up, tracking US treasuries. June futures on three-year treasury bonds ended up 0.07 points at 106.56.

Yields on the five-year treasury bonds and three-year treasury bonds each ended down one basis point.