(Updates to midday)
SEOUL, May 8 (Reuters) - The South Korean won erased most of
its earlier gains against the dollar on Friday as Seoul shares
turned lower prompting investors to cover short dollar positions.
Investors were reluctant to buy the won KRW= on caution
over possible dollar-buying intervention by the authorities as a
firmer won poses a threat to export competitiveness for Asia's
fourth-largest economy.
The local currency was quoted at 1,261.1/2.1 per dollar as of
0305 GMT, compared with Thursday's domestic close KRW=KFTC of
1,262.3. It gained to as firm as 1,249.8, the strongest since
Dec. 30, 2008.
"The trend is still bullish. But given wariness (of the
authorities), it will take time for the won to strengthen past
1,250 again," said a foreign bank dealer.
Seoul shares turned down with falling 0.69 percent
while foreign investors bought a net 82.8 billion won worth of
stocks in the country's main exchange.
0305 GMT 0015 GMT prev close
Won KRW= 1,261.1/2.1 1,254.4/5.3 1,262.3
Yen/won JPYKRW=R 12.7332/72 12.6301/20 12.7956/82
KOSPI 1,391.46 1,406.71 1,401.08
(Reporting by Cheon Jong-woo and Lee Kyoung-ho; Editing by
Jacqueline Wong)
