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S.Korea won trims losses on exporters, stock deals

Published: 20 Nov 2009 00:06:04 PST

* Won recovers most losses after hitting 2-week low

* Seen staying weak on profit-taking

* Eyes on NPS dlr demand for London building purchase (Updates to domestic close)

SEOUL, Nov 20 - The South Korean won erased much of its earlier losses after hitting a 3-week low against the dollar on Friday as exporters chased it for settlements on dips and on demand related to foreign investors' stock purchases.

The won <KRW=> found more support after an official of Korea Electric Power Corp (KEPCO) <015760.KS> said the state-run company completed dollar purchases to buy back a combined $1.2 billion in foreign currency bonds in the morning.

The local currency is expected to remain under pressure as more investors seek safe havens, analysts said.

Market players also remain wary of possible dollar-buying intervention by the foreign exchange authorities, they added.

"The won is more likely to fall as more investors will book profits from riskier assets, which will support the dollar in the short term although its bearish trend remains intact," said Jeong My-young, a currency strategist at Samsung Futures Inc.

The South Korean unit was quoted at 1,157.9/9.9 per dollar as of 0600 GMT, compared with Thursday's domestic close <KRW=KFTC> of 1,157.1.

Earlier, the won weakened to as soft as 1,168.5, the weakest since Nov. 6, hit by a firmer dollar as investors continued to sell higher-yielding currencies.

Seoul shares <.KS11> ended flat as foreign investors bought net 36.1 billion won worth of stocks.

Foreign investors purchased a combined net 1.03 trillion won worth of stocks on the main exchange.

The National Pension Service (NPS) plans to buy up to $300 million in the local currency market by early December for its purchase of HSBC's <HSBA.L> European headquarters in London, sources from the government and the pension service said, prompting expectations for more dollar demand.

On Nov. 13, HSBC said it would sell the landmark headquarters to NPS for 772.5 million pounds ($1.28 billion). [ID:nSE0329394]

0600 GMT 0105 GMT Prev close Won 1,157.9/9.9 1,163.6/4.1 1,157.1 Yen/won 13.0204/72 13.0771/60 12.9770/81 KOSPI 1,620.60 1,616.53 1,620.54