Employees work at the dealing room of Hana Bank in Jung-gu, Seoul, on Wednesday. [Yonhap]
Employees work at the dealing room of Hana Bank in Jung-gu, Seoul, on Wednesday. [Yonhap]

The won-dollar weekly closing rate dropped below the 1,500-won mark for the first time in 37 trading days Wednesday, as easing foreign net selling and growing expectations for won demand ahead of SK hynix's American depositary receipt listing pushed the currency stronger.

The won closed the weekly session at 1,498.5 won per dollar at 3:30 p.m. in the Seoul foreign exchange market, down 29.7 won from the previous trading day. It was the first time the weekly closing rate had settled in the 1,400-won range since May 14, when it closed at 1,491 won — a gap of 37 trading days. On an intraday low basis, it was the first time since May 29, when it touched 1,494.9 won, marking 27 trading days.

The won opened at 1,516.5 won at 6 a.m. and steadily extended its decline throughout the session. It fell as low as 1,502.7 won around 2:46 p.m. before rebounding sharply, then dropped again just before the weekly close to finish below the 1,500-won threshold.

Analysts attributed the won's strengthening to a reduction in foreign supply-demand pressure and growing expectations that SK hynix's ADR listing would boost demand for the won.

"Foreign investors posted net purchases of Kospi shares for the first time in a while, which significantly eased supply-demand concerns," said Lee Min-hyuk, chief economist at KB Kookmin Bank. "The ADR proceeds have not yet flowed in, but there is a widespread expectation that the exchange rate will fall sharply once the actual funds arrive — so it appears some dollar selling came in advance as players unwound their positions."

Foreign investors net purchased 331.2 billion won ($217 million) on the Kospi on Wednesday, marking their first net purchase in nine trading days since June 25, when they bought 105 billion won.

SK hynix is set to begin trading on a US ADR on Friday. If the dollars raised through the ADR issuance are converted into won and repatriated, they are expected to exert downward pressure on the exchange rate.

"The foreign exchange authorities have consistently signaled their intention to stabilize the elevated exchange rate, and that wariness has compounded the move — which is why I think the rate fell so sharply," Lee added.


kimstar@heraldcorp.com