The South Korean won hit a one-week high against the dollar on Wednesday as foreigners posted their biggest daily local stock purchases in 1-1/2 half years on hopes for economic stimulus packages at home and abroad. The won found further support as local investment trust firms chased the unit to limit currency-related risks from their overseas investments.
The local currency is expected to rise further as investors are likely to chase more risky assets such as South Korean stocks, bolstering won demand, analysts said. "The won is more likely to strengthen to a firm resistance line of 1,280 (per dollar) as higher risk appetite may bolster stocks further," said Jeong My-young, a currency strategist at Samsung Futures Inc.
The South Korean unit was quoted at 1,292.3/3.1 per dollar as, compared with Tuesday's domestic close of 1,312.5. It gained to as strong as 1,281.9. its highest since December 31, 2008. Foreign investors bought a net 562.7 billion won worth of South Korean stocks in the country's main exchange, the biggest daily net buying since October 2007.
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