SEOUL, Nov. 9 (Yonhap) -- The South Korean currency rose for the fourth straight session and hit a two-month high Wednesday on hopes that the U.S. Federal Reserve could slow the pace of rate increases and China might ease up on its long-held tight coronavirus restrictions, market watchers said.
The local currency ended at 1,364.80 won Wednesday, up 20.10 won from a day earlier after rising to as high as 1,360.20 in intraday trading. It was the first time the won has risen to the 1,360 range since Sept. 2.
Wednesday's ascent also marked the fourth straight session of a rise in the won's value and the third consecutive double-digit jump. For the previous four sessions, the won has gained about 4 percent against the greenback.
The won's rise came as investors bet the U.S. inflation data due on Thursday (local time) could point to slower-than-expected price hikes, which will augment the case for the Fed to slow the pace of rate increases.
Hopes for China easing up on its strict zero-coronavirus policy have also bolstered risk-taking sentiment in the market, leading the won to gain ground in recent days.
Rumors have swirled that China could ease its zero COVID-19 policy, under which strict lockdowns have been imposed in its major cities. Less access to the world's largest market has hit South Korea hard, as it depends heavily on exports for its economic growth.
Chinese health authorities later said it will keep its current antivirus curbs in place but market hopes for its economic reopening, bolstering risk-on sentiment among investors.
Market watchers have also been awaiting the results of U.S. mid-term elections, as they could signal a change in the course of Washington's economic policy down the road.
A Republican victory is considered a boon for the market, as it could put brakes on the Joe Biden administration's fiscal spending plan, eventually leading to eased inflation and less cases for the Fed to keep raising rates as aggressively as before.
In the local stock market, foreigners bought about 400 billion won (US$293 million) worth of shares in net value Wednesday, which observers cited as another reason for the won's ascent against the dollar. The benchmark Korea Composite Stock Price Index ended up 1.06 percent.
South Korea's currency has been under pressure, as the U.S. dollar has gained ground thanks to the Fed's aggressive monetary tightening and worries over global recession that drive money to leave for safer assets in the U.S.
Authorities are concerned about an excessive slide in the won's value, as it could compound the government's ongoing efforts to combat inflation by making imports costlier and put strains on businesses.
The Bank of Korea, South Korea's central bank, has hiked its key policy rate eight times by a combined 2.5 percentage points since August last year to keep a lid on inflation.
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