Won Rises to Strongest in Nearly Two Years as Dollar-Won Rate Falls to 1,333.30

The South Korean won climbed to its strongest level in nearly two years, supported by lower global oil prices and dollar sales from domestic companies.

Bloomberg reported on October 11 that the dollar-won exchange rate fell as much as 0.8% intraday to 1,333.30 won after trading resumed following a three-day holiday. The won later gave up part of its gain and was trading about 0.5% stronger.

The won's advance was driven largely by broad dollar weakness tied to falling oil prices. As crude declined, major currencies including the euro, British pound and Japanese yen also strengthened against the dollar. Other major Asian currencies moved in a similar pattern.

"The dollar is broadly weakening as lower oil prices lift the euro, pound and yen, and the won is rising in tandem," said Min Kyung-won, an economist at Woori Bank.

Dollar sales by South Korean exporters also supported the won. Selling demand is set to continue, particularly from semiconductor companies. Still, thin trading volume and a holiday in Japan's financial markets were adding to exchange-rate volatility.

The won has gained 7.7% against the dollar this year. It was the worst-performing major Asian currency in the first half, but has posted the region's biggest gain in the second half as strong exports coincided with corporate dollar selling.