By Yoon Ja-young
Staff Reporter
The Korean currency has gained strength against the U.S. dollar for three days in a row, with the exchange rate falling below 1,520 won per greenback.
The won closed at 1,511.5 won per dollar Tuesday, gaining 37.5 won in value from the previous day. It is the lowest won/dollar rate since Feb. 23.
The local currency started trading at 1,554 won per dollar, losing 5 won from the previous day on the overnight fall on Wall Street. The rate once breached 1,560 won as overseas investors actively bought dollars.
Many foreign investors, however, seemed to determine later in the morning that the won/dollar rate would head down and began to sell dollars. Other market players accelerated the fall, with banks selling dollars and importers delaying dollar payment on expectations that the won would gain strength further against the greenback.
The Seoul stock market, which endured the fluctuation in the foreign exchange rate, also helped the won remain strong. The main index KOSPI jumped 20.47 points, or 1.91 percent, to close at 1,092.20, as foreign investors and institutional investors bought shares. The junior Kosdaq market, meanwhile, edged down 0.81 points to 377.92.
Banks and credit card companies added to the won/dollar rate fall, according to analysts, as they sold dollars they got as dividends from VISA Card.
The Bank of Korea's announcement that there is no liquidity problem in the country's foreign exchange reserve and the lessening tension with North Korea also served as positive factors.
``It seems that they seek to realize gains as the won/dollar rate hit its peak. The stock market rebounded, and other Asian currencies also closed gaining against the dollar,'' said a strategist at KEB Futures. He said, however, it doesn't mean the won/dollar rate completely changed direction. Negative factors from the United States and Eastern Europe should be cleared up first for the Korean won to gain to below 1,500 won, he added.
The Korean currency has dipped roughly 17 percent against the dollar this year, one of the biggest losers among Asian currencies.