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S.Korean won at 11-mth high; intervention spotted

Published: 16 Sep 2009 00:05:43 PST

* Won hits 11-month high on risk appetite

* Intervention spotted to maintain won weaker than 1,210

* Seen staying firm on economic recovery hopes (Updates to domestic close)

SEOUL, Sept 16 - The South Korean won hit an 11-month high against the dollar on Wednesday as growing hopes for an economic recovery at home and abroad prompted investors to seek riskier assets including stocks.

The foreign exchange authorities, however, were spotted buying dollars to curb the won's <KRW=> rise and maintain the export competitiveness of Asia's fourth-largest economy.

The local currency was expected to stay firm as investors were seen likely to keep looking for riskier assets, pushing down the greenback, although the government would slow its gains, analysts said.

"After breaking through major resistance at 1,230 per dollar and 1,220, it became a matter of time for the won to break through 1,200 unless stocks fall or foreigners sell shares," said Jeong My-young, a currency strategist at Samsung Futures Inc.

"The authorities are the only factor preventing won gains, but they will not reverse a trend as the won is not the only currency that is rising," she added.

The South Korean unit was quoted at 1,210.15/2.15 versus dollar as of 0600 GMT, compared with Tuesday's domestic close <KRW=KFTC> of 1,218.5.

The won strengthened to as firm as 1,207.5, the strongest since Oct. 15, 2008, before the foreign exchange authorities stepped in the market.

"The authorities kept absorbing dollar offers to defend the 1,210 (per dollar) level," a local bank dealer told Reuters, asking not to be identified as he was not authorised to speak to the press.

Earlier, the Finance Ministry sent a waring of actions to prevent the currency's sharp rise.

Seoul shares <.KS11> ended up 1.81 percent with foreigners buying a net 890.0 billion won worth of stocks, the largest since Oct. 11, 2007.

On the corporate front, South Korea's Hyundai Rotem Co, a Hyundai motor Group unit, said earlier it and Hanwha Corp <000880.KS> had won a 160 million euro ($235.3 million) order to provide railcars to Greece, prompting expectations for more won demand. [ID:nSEO284563]

0600 GMT 0020 GMT Prev close Won 1,210.15/2.15 1,210.5/1.5 1,218.5 Yen/won 13.3121/98 13.3286/81 13.3703/69 KOSPI 1,683.33 1,673.60 1,653.40