October 24, 2013 11:30
The won strengthened above W1,060 against the U.S. dollar on Wednesday for the first time in around nine months due to continued foreign stock buying and forecasts that the Fed would maintain quantitative easing.
The won closed up W5.0 at W1,055.8 against the greenback, the highest close since Jan. 11 when it reached at W1,054.7.
Dealers said the dollar weakened due to forecasts that the Fed would not taper quantitative easing until next year.
Foreign investors snapped up more than W200 billion worth of Korean stocks on Wednesday, continuing an unbroken 39-day buying spree.
The strong won worries exporters, whose price competitiveness is under threat. Exporters have set W1,060 as the point when they start to lose money.
The won strengthened above W1,100 in early September and has gained another four percent in just 50 days. But dealers said chances are slim it will climb much further in the short term.
Deputy Prime Minister for Economic Affairs Hyun Oh-seok hinted at reluctance by forex authorities to intervene. He said export competitiveness "must not rely solely on price competitiveness" and advised attention to market conditions in general rather than "minute movements" of exchange rates.
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