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Korean Won up to Eight Month High at 1,074.15 per dollar

South Korea’s won rose to the strongest level in almost eight months as the Federal Reserve’s unexpected decision last week to maintain its record stimulus fueled inflows to local markets. Government bonds climbed.

Overseas funds bought more local equities than they sold for the 19th straight session as South Korean markets reopened after a three-day holiday. The Fed on Sept. 18 said it will keep buying $85 billion of bonds each month. Economists surveyed by Bloomberg News had predicted a $5 billion reduction. The won has gained 6.3 percent this quarter, Asia’s best performance, as foreigners added to $5.9 billion of net purchases of shares this month through Sept. 17, stock exchange data show.

“After the Fed’s surprise, we expect foreign investors to keep buying South Korean shares,” said Jeon Seung Ji, a currency analyst at Samsung Futures Inc. in Seoul. “As the won is expected to strengthen further, traders are wary of possible intervention by authorities to slow the pace of its gains.”

Bloomberg [1]

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