The South Korean won advanced to a five-week high against the dollar on Monday, as exporters unloaded dollars on growing expectations for an interest rate cut by the Federal Reserve this week.
But the won ended up a tad lower due to wariness of possible intervention by South Korean authorities and as technical indicators signalled the local currency has overshot, having had gained about 2.5 percent since a 10-month trough hit in August.
"As exporters' sales were piling up, the dollar stepped back," a local bank dealer said. "It seems to be up to the authorities as to whether it will retreat further or not."
The won was last quoted at 928.3/9 per dollar, compared with the previous closing bid of 928.1. It leapt to a session high of 927.1, its highest level since August 10. It faces resistance at 928, where a 120-day moving average stood. The 14-day Relative Strength Index broke below 30, indicating the won has been overbought to the dollar.