Korean won further rises against US dollar on foreign equity buying, authorities' caution over FX volatility

Officials work at a dealing room of Hana Bank in Seoul, Wednesday. Yonhap

The Korean currency strengthened against the U.S. dollar for the second consecutive session Wednesday, supported by foreign stock buying and renewed assurances from authorities that they will take measures to stabilize the foreign exchange market.

The won was quoted at 1,465.6 per dollar as of 3:30 p.m., up 6.8 won from the previous session.

It marked the second straight day of gains and the strongest level in a week.

Earlier in the day, Finance Minister Koo Yun-cheol told a press conference that foreign exchange authorities are closely monitoring speculative trading and herd-like behavior in the market, vowing firm responses to excessive volatility.

The message was the latest in a series of moves by the authorities to curb currency volatility as the won has remained well below the psychologically important 1,450-won level recently.

On Monday, the currency fell to 1,477.1 won per dollar, its lowest level since April 9, when it closed at 1,484.1 won, the weakest in 16 years.

In response, the finance ministry, the Bank of Korea (BOK), the National Pension Service (NPS) and the welfare ministry overseeing the pension fund have launched a four-way consultation body, holding their inaugural meeting Monday to discuss ways to balance the NPS' investment returns with stability in the foreign exchange market.

Wednesday's gain also came as foreign investors moved to purchase local shares amid hopes for a rate cut in the United States.

The benchmark Korea Composite Stock Price Index (KOSPI) jumped 2.67 percent to finish at 3,960.87 on the day.