South Korea Won Up Late In Quiet Trading; Bonds Steady

The South Korean won was higher against the U.S. dollar late Friday as positive data from the U.S. and Germany on Thursday boosted hopes about the global economy.

Sentiment toward the local currency also got some support from the 0.6% gain in the local stock index Friday, though a lack of leads during the Asian session kept currency trading relatively light, traders said.

"The market didn't move much. Orders were largely mixed with dollar selling from exporters and buying from offshore players, and there was no momentum" to drive the local currency in a particular direction, said a trader at a local bank.

The dollar moved between KRW1,124.00 and KRW1,125.90 during the session. Trading volume was just $7.42 billion compared with last week's daily average of $12.64 billion.

For the last two weeks, the U.S. currency has been largely trapped in a band between KRW1,120 and KRW1,130, and the market hasn't really responded to any cues after the euro zone's long-awaited decision on the Greece bailout on Tuesday. Analysts say the dollar/won pair will likely continue to move without direction until clearer signals about the euro-zone debt situation and the global economy emerge.

"The market remains doubtful about whether Greece will be able to deal with the risk of default," said KEB Futures currency analyst Jung Kyung-parl.

Investors will likely keep their eyes on liquidity conditions in Europe as the European Central Bank is expected to announce a second long-term refinancing operation on Feb. 29, Jung said. "If the amount is smaller than EUR1 trillion, which is widely expected among market participants, risk appetite will probably weaken."

He tipped the dollar to move between KRW1,115 and KRW1,132 next week.

Korea government bonds were little changed, taking a breather after rising in the previous two days.

Data on jobless claims in the U.S. and business confidence in Germany weighed on bond prices, but "the downside will likely be limited amid deepening concerns about rising global oil prices" and their impact on the domestic economy, said Lee Kee-wook, a fixed-income analyst at KDB Daewoo Securities.

He added lead March futures are expected to trade in a 104.15-104.35 band for the near term.

The futures ended two ticks lower at 104.22 Friday.