Korean won rises 3.37 pct to U.S. dollar on stock rally

SEOUL, April 2 (Yonhap) -- The South Korean currency jumped 3.37 percent against
the U.S. dollar on Thursday as foreign investors bought local stocks, sending the
Seoul bourse sharply higher, dealers said.
The local currency closed at 1,334.5 won to the dollar, up 45 won from Wednesday
and marking the largest daily gain since Dec. 10 when it climbed by 53.2 won.
"The won gained strength to the dollar as the Seoul bourse rallied and offshore
investors unloaded the greenback to cut further losses," said Jeon Seung-ji, a
currency analyst at Samsung Futures Inc. "A rise in the country's foreign
exchange reserves also soothed investor sentiment."
The Korean currency climbed to as high as 1,331 won to the greenback at one point
in trading. The won's value has fallen 5.6 percent so far this year.
The country's key stock index jumped 3.54 percent to 1,276.97 as sentiment was
eased by several improving economic indicators. Foreign investors scooped up a
net 324.6 billion won (US$243.3 million) worth of stocks on the main bourse.
Improving economic data raised cautious hope that the Korean economy could be
bottoming out. The country's industrial output sank 10.3 percent on-year last
month, but gained 6.8 percent in February from the month before, after posting a
1.6 percent advance in January. South Korea's trade surplus reached a record
US$4.6 billion in March on a sharp drop in imports.
A jump in South Korea's foreign exchange reserves contributed to the won's
strength, analysts said. The country's foreign reserves reached US$206.34 billion
as of the end of March, up $4.8 billion from a month earlier and marking the
largest monthly gain since November 2006.
The market also shrugged off geopolitical tensions stemming from North Korea's
planned rocket launch. Pyongyang has said it will launch what it claims is a
communications satellite between April 4-8, but neighboring countries say that
could be a cover to test a Taepodong-2 missile, which can theoretically strike
the western United States.
Analysts warn, however, that it is still too early to say whether the local
foreign exchange market will fully stabilize and that the Korean unit is likely
to face some fluctuation down the road.
"Some economic data shows signs of improvement. But it is premature to say that
the economy might hit bottom, which would limit the won's gain," Jeon said,
adding that the local currency may rise to the 1,250 won level in the second
quarter.
sooyeon@yna.co.kr
(END)