Won tests foothold in 1,400s as dollar risks linger

The Korean won has recovered from its weakest level since the Asian financial crisis, trading below the psychologically important 1,500-won-per-dollar level for the first time in three weeks, analysts said Wednesday.

The move was driven by easing foreign investor rebalancing and expectations of increased dollar inflows, they said.

Still, they cautioned that further gains in the won may be limited, with geopolitical tensions and the possibility of higher U.S. interest rates likely to keep the dollar supported.

The won closed at 1,555.8 per dollar on July 2, its weakest level since March 2009 based on onshore trading, according to the Seoul foreign exchange market.

It fell below the 1,500 won mark on July 8, closing at 1,498.5, before briefly rebounding to 1,506.1 won the following day.

The currency strengthened again to finish at 1,493 on July 14 and has since remained in the upper-1,400 won range.

On Wednesday, it ended onshore trading at 1,480.1.

The average won-dollar exchange rate based on onshore closing prices stood at 1,488.6 won in the third week of July, falling below the 1,500 wo ...