The South Korean won ended slightly higher on Tuesday as exporters including shipbuilders and electronics makers sold dollars ahead of the end of the month, prompting investors to clear dollar-long positions.
But gains in the won were limited on expectations that the US Federal Reserves may repeat concerns over inflationary risks in the world's top economy and on demand for the US unit from importers and foreign equity investors. The won settled at 958.5 per dollar, up 0.11 percent from Monday's local close of 959.6. It hit a session low of 961 after opening at 960.5 on a weaker yen.
"It was reconfirmed that the won would not stay long under the level of 960 on hefty dollar sales from exporters," said a local bank dealer. "Now, more market players regard 960 as a level to sell dollar."
The Japanese yen, which the won usually follows closely as South Korean companies compete with Japanese peers in key export markets, was quoted at 119.54/57 per dollar versus 118.93/96 in late Asian trade on Monday.
Investors are awaiting the Fed's two-day monetary policy meeting, which begins later in the day. The Fed is widely expected to hold its key interest rate steady at 5.25 percent for the third meeting in a row.