Hopes that expansionary fiscal policies from the government of newly elected President Moon Jae-In would boost the economy pushed up the South Korean won , while global risk sentiment strengthened on a rise in oil prices, further supporting the currency.The won was quoted at 1,128.0 against the dollar as of 0246 GMT, up 0.7 percent versus Wednesday’s close of 1,135.8. The risk-on mood also drove a rebound in South Korean shares after Wednesday’s sharp losses, with the Korea Composite Stock Price Index (KOSPI) up 0.9 percent at 2,289.74 points.
Min Gyeong-won, a foreign exchange analyst at NH Futures, noted market participants’ expectations for expansionary fiscal policy, but added: “While the market is betting on stronger won, there has to be a decisive momentum in the market for the currency to rise past the 1,130 level and hold on to the new level,” Min said.
“Market players’ wait-and-see approach to the Federal Reserve’s rate movements for the year is holding the dollar, preventing a firm gain by the won.” Offshore investors were set to end a four-day buying spell, selling a net 16.8 billion Korean won ($14.84 million) worth of KOSPI shares near mid-session.
But LG Electronics gained over 3 percent, helped by foreign buying, while shares of Samsung SDI rose 4.2 percent on tech sector optimism. Advancing issues outnumbered declining ones by 474 to 323. June futures on three-year treasury bonds gained 0.03 point to 109.23.
(Reporting by Dahee Kim; Editing by Eric Meijer)