An electric monitor at Hana Bank's dealing room shows the won standing at 1,390.5 won per dollar shortly after the daytime trading closing on Friday. (Yonhap)
An electric monitor at Hana Bank's dealing room shows the won standing at 1,390.5 won per dollar shortly after the daytime trading closing on Friday. (Yonhap)

The Korean won’s value against the dollar reached a six-month high Friday as traders price in the assumption that the country will be pressured to push for the gain of its currency to reach a trade deal with the US.

The won stood at 1,389.6 won per dollar as of daytime trading closing Friday, appreciating by 4.9 won from the previous session. It was the strongest level of won per dollar as of daytime closing since hitting 1,386.4 won per dollar on Nov. 8.

After opening at 1,397 won, pricing in the offshore trades, the won briefly weakened to the 1,400 won level against the greenback but regained strength to reach 1,387.9 won per dollar at around 3 p.m.

Traders are factoring in speculation that the Korean forex authorities might allow the local currency to appreciate to help the country reach a trade deal with the US, while the US pushes for a devaluation of the dollar to resolve trade deficit woes.

The won strengthened Thursday when it stood at 1,394.5 won as of daytime closing, gaining value by 25.7 won in a single trading day, following a news report that Korean and US financial authorities held a working-level meeting in Milan earlier this month.

“The consensus is that the Korean won is severely undervalued in the market, even considering the geopolitical risks and the economic fundamentals of the country,” Baek Seok-hyun, an economist at Shinhan Bank, said.

“Because of the undervaluation, short-term trading demands excessively mount up towards won appreciation, even reacting to small events.”


silverstar@heraldcorp.com