By Ye Xie and Kim-Mai Cutler Oct. 16 (Bloomberg) -- The dollar rose against the euro for a second day as a sell-off in global stocks prompted investors to buy the greenback as a haven. South Korea's won fell the most against the dollar in almost 11 years after Standard & Poor's said it may cut banks' credit ratings. ``The flight to liquidity and safety is supporting the dollar,'' said Matthew Strauss, senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. The dollar increased 0.7 percent to $1.3401 per euro at 10:56 a.m. in New York, from $1.3499. The yen declined 0.7 percent to 100.76 per dollar from 99.96 yesterday. Japan's currency traded at 134.74 per euro, compared with 134.93. It touched 133.38, near the strongest since June 2005 The won fell 10.8 percent to 1,372.50 per dollar after S&P said it may downgrade Kookmin Bank and six other South Korean financial companies on concern they will have difficulty refinancing maturing debts. It was the biggest one-day drop in the won since the aftermath of South Korea's rescue by the International Monetary Fund in December 1997. The dollar pared its gain versus the yen after the Philadelphia Fed reported that its factory index dropped to minus 37.5 this month, the lowest reading since October 1990, from 3.8 in September. Negative readings signal contraction. The index averaged 5.1 last year. To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Kim-Mai Cutler in London at kcutler@bloomberg.net

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