South Korea Won Down Late; Hits Near 4-Week Low On Greece Woe; Bonds Up

The South Korean won was lower against the U.S. dollar late Thursday, briefly hitting a near four-week low in Asian trade, as worries mount over international lenders' delay in approving Greece's second bailout package.

Risk appetite broadly contracted as investors grew jittery after the euro-zone finance ministers, and the Eurogroup President Jean-Claude Juncker, said Wednesday that decisions related to the second bailout for Greece will be finalized on Monday, Fed. 20.

Active dollar selling by local exporters kept the greenback below the 1,130 level for most of the Asian session, but persistent risk-off dollar buying among offshore players and onshore banks, eventually lifted the U.S. unit to KRW1,132.40 in late trade--the highest mark for the dollar since it touched KRW1,137.30 on Jan. 20.

Traders said dollar strength was also boosted by the release of the Federal Open Market Committee minutes for its January meeting, which dimmed hopes for additional quantitative easing measures by the Fed to stimulate the U.S. economy.

"The market is becoming doubtful about Greece. Even if it succeeds in avoiding a default in March, the country will probably face a similar challenge again in the next few months [when another debt nears maturity]," said Jung Kyung-parl, a currency analyst at KEB Futures.

The won may move sideways until next Monday as hope and pessimism over Greece fluctuate, but will likely have a clearer direction after that, he said.

Jung tipped the dollar to move between KRW1,110-KRW1,140 in the next few days.

Korea government bonds were higher as investors flocked to safety amid a risk-averse atmosphere.

Tong Yang Securities fixed-income analyst Lee Hak-seung said gains in local bonds are expected to be short-lived as uncertainties over the Greek debt crisis are not likely to threaten the other European countries' financial systems.

He tipped March futures' resistance at 104.30.

The futures rose 10 ticks to 104.27, with foreigners snapping their eight-day net-selling spree. They bought a net 3,574 contracts Thursday.