SEOUL (Dow Jones)--The South Korean won was lower against the U.S. dollar late Tuesday, weighed by renewed concerns over the euro-zone sovereign debt crisis and a poor showing on the local bourse.
The dollar traded as high as KRW1127.90 during the session but stayed largely within a narrow range. The benchmark Korea Composite Stock Price Index recouped some of its early losses and closed down 0.9%.
Analysts said that relatively firm economic data from the U.S., and talk about potential moves from the Chinese government to support its domestic economy, appeared to check some of the U.S. dollar bias during the session. Market traders also said the dollar was capped below its resistance at KRW1,130 on expectations that a breach would trigger dollar sales from exporters.
KEB Futures analyst Jung Kyung-parl said that the dollar may trade within a KRW1,110-KRW1,135 range for some time, adding that market volatility will continue as investors flip between hope and fear over the evolving euro-zone crisis.
"From a long-term perspective, though, it's likely that the euro will weaken and drag the won down along with it. Fundamentals point to a high chance for a euro-zone economic slump, and there is also possibility for more rate cuts from the European Central Bank," Jung said.
Bonds posted modest gains, as investors opted for safe-haven assets amid continuing global uncertainties and the weaker stock market. Foreign inflows into the market also appeared to lift the paper.
Lead December bond futures ended up 15 ticks at 104.49.
-By Se Young Lee, Dow Jones Newswires; +82 2 3700 1904; vincent.lee@dowjones.com
