S.Korean won rises on weak dlr, dividends cap gain

SEOUL, April 17 (Reuters) - The South Korean rose early on
Thursday amid broad dollar weakness and gains in the local stock
markets, but the domestic currency's gains were capped by dollar
demand linked to dividend payments.

The dollar held near an all-time low against the euro on
Thursday after a sharp fall in housing starts refinforced
expectations for another U.S. interest rate cut.

The won <KRW=> was quoted at 986.7/7.4 per dollar at 0105
GMT, compared with the previous closing bid of 989.25.

Some banks sold the U.S. unit to clear their dollar long
positions, but the offers were absorbed by demand anticipating
refiner S-Oil's (010950.KS: Quote, Profile, Research, Stock Buzz) dividend payments to foreigners.

The benchmark South Korean stock index rose 1.18
percent with foreigners buying a net 67 billion won in shares on
the main board.

0105 GMT prev close
Won <KRW=> 986.7/7.4 989.25
Yen/won <JPYKRW=R> 9.6782/889 9.7176
KOSPI 1,779.28 1,758.56
(Reporting by Rhee So-eui and Lee Kyoung-ho; editing by Ken
Wills)