Korean won hits fresh 9-month high on stock rise

(ATTN: RECASTS paras 2,4 to clarify)
By Kim Soo-yeon
SEOUL, Aug. 3 (Yonhap) -- The South Korean currency surged to a new nine-month
high against the U.S. dollar on Monday as offshore investors continued to snap up
Seoul stocks amid economic recovery hopes, currency dealers said.
The local currency closed at 1,222.4 won to the greenback, up 6.1 won or 0.5
percent, from the previous session, the strongest level since Oct. 14, 2008 and
the highest yearly close.
"Stock rallies and a falling dollar put upward pressure on the Korean currency,"
said Jeon Seung-ji, a currency analyst at Samsung Futures Inc. "But the 1,220-won
level was supported as market players remained cautious against possible
dollar-buying intervention."
The Korean unit climbed to as high as 1,220.5 won at one point as the stock
market gained momentum.
Foreign investors relentlessly continued to scoop up Korean stocks for the 14th
straight session, providing support to the Korean won. Offshore investors bought
a net 372.7 billion won (US$304.9 million) worth of local stocks on the main
bourse.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.49 percent to
1,564.98, the highest close this year.
A batch of economic data at home and abroad are raising expectations about an
economic recovery.
South Korea's trade surplus reached $5.14 billion in July as imports shrank
sharply more than exports. The monthly surplus was smaller than a record $7.27
billion seen for June, but total trade volume exceeded the $60 billion mark for
the first time since October 2008 when the country was in the midst of
U.S.-sparked global financial meltdown.
The U.S. economy posted a smaller-than-expected contraction of 1 percent in the
second quarter, easing concerns about the depth of the downturn of the world's
largest economy.
Analysts say that if a buying spree of local stocks by foreigners goes on, the
Korean currency would gain ground further.
"The pace of the won's ascent depends on how strong the stock market will remain.
But caution against potential intervention by foreign currency authorities is
likely to limit the pace, making it difficult for the 1,200-won level to be
broken," Jeon added.
sooyeon@yna.co.kr
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