Korean currency jumps 2.9 pct to dollar

SEOUL, Dec. 29 (Yonhap) -- The South Korean currency jumped 2.85 percent against the U.S. dollar Monday on suspected intervention by foreign exchange authorities to boost the won's year-end value, dealers said.

The local currency closed at 1,263 won to the greenback, up 36 won from Friday's
close, after jumping as high as 1,260 won at one point. Daily trading volume
reached US$3.36 billion.
The Korean won rose for the third straight session with its value declining about
26 percent to the dollar so far this year.
"Market players remained cautious against any possible dollar sale intervention
during the session," said Shin Jin-ho, a currency analyst at Woori Futures Co.
"But some hunted for bargains on expectations that the won may lose its value
after the end of the year."
Local banks and firms are closely watching the won's movement toward the year-end
as their foreign currency denominated debt would be assessed on their books in
accordance with the won's value on Tuesday, the last trading day of this year.
South Korea's smaller firms have been suffering from losses related to currency
options known as "knock-in knock-out (KIKO)" contracts, as the won's steep losses
to the dollar have led to snowballing losses.
The benchmark Korea Composite Stock Price Index (KOSPI) edged down 0.02 percent
to 1,117.59, limiting the won's gain during the session.
Analysts say the local currency will likely gain ground per the dollar further on
Tuesday, possibly affected by the authorities' intervention.
"As tomorrow's foreign exchange rate is important, a strong dollar sale
intervention may emerge," said Jeon Seung-ji, a currency analyst at Samsung
Futures Inc.
sooyeon@yna.co.kr
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