Won jumps against dollar on rising stocks

SEOUL, March 10 (Yonhap) -- The South Korean currency surged 2.48 percent against
the U.S. dollar on Tuesday, extending its gaining run to three sessions, as
foreign investors turned strong buyers to snap up local shares, dealers said.
The local currency closed at 1,511.5 won to the greenback, up 37.5 won from
Monday, after rising as high as 1,500 won at one point in afternoon trade. For
the past three sessions, the won rose 3.74 percent against the dollar.
The won, however, has lost 16.7 percent of its value so far this year due to
worries about South Korea's dollar liquidity.
"The won soared as the Seoul bourse gained ground and foreigners bought local
shares," said Jeon Seung-ji, a foreign exchange analyst at Samsung Futures Inc.
"Market players seemed to view the 1,600-won mark as a psychological resistance
level."
The benchmark Korea Composite Stock Price Index (KOSPI) advanced 1.91 percent
with foreigners becoming net buyers of local stocks for the first time in three
sessions.
Analysts say comments by the central bank that total foreign reserves are
immediately available and dollar sales by local card issuers related to Visa
Inc's dividend payouts also gave some relief to the local currency.
The Bank of Korea said earlier in the day that South Korea's entire foreign
exchange reserves, totaling some US$201.54 billion, are available at any time
because they are invested in highly liquid assets that are easily converted into
cash.
But experts caution it may be too early to say whether the local currency will
make a full recovery as economic uncertainty at home and abroad lingers.
"Cancellation of ship orders and dividend repatriation by foreigners will likely
put some downward pressure on the local currency," Jeon said.
After winning orders, local shipbuilders usually sell dollar forwards to hedge
currency risks, but a recent spate of order cancellations are expected to prompt
shipyards to snap up dollars in the spot market in order to settle their forward
positions.
sooyeon@yna.co.kr
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