The won jumped as much as 0.9 percent against the dollar on Friday, first lifted by rallying regional stock markets and later by talk that a foreign company was buying the currency for an already announced investment in South Korea.
The won also received some support from Federal Reserve Chairman Ben Bernanke, whose comments on the financial market turmoil reinforced expectations of further US interest rate cuts. The won rose to as high as 920.3 per dollar right before ending the local session at 921.0/1.3, compared with the previous closing bid of 928.4.
The South Korean currency gained 1 percent against the dollar for the week, but lost 1.9 percent during the month. "Dollar sales by exporters were the main driver at first, but later rumours that a foreign company was buying the won for a planned investment sparked a series of dollar unwinding by traders long with dollars," said a foreign bank dealer.
The dealer said Dutch financial services group ING Group was rumoured to have converted about $400 million into the won for one of its investment plans in the country, but that could not immediately be confirmed. Seoul stock market's benchmark KOSPI rose as much as 2.2 percent before ending the day up 1.5 percent, following a 2.3 percent gain on Thursday.