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Seoul: Won drops as dollar firms after ECB policy meeting; stocks down

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[SEOUL] The South Korean won fell on Friday morning, tracking the euro, which slipped on comments from the head of the European Central Bank who defended its accommodative money policy.

The local currency was trading at 1,138.7 per dollar, down 0.5 per cent compared with Thursday's close of 1,132.9 as of 0213 GMT. The won's losses were capped as the euro steadied towards midday but the currency was set to snap a three-day gaining streak.

ECB President Mario Draghi's comments on possibly taking further actions to stimulate the economy had pressured the euro overnight.

"After the ECB policy meeting, we're seeing global investors quickly turning their focus on the US Federal Reserve policy meeting next week," said Jung Sung-yoon, a foreign exchange analyst at Hyundai Futures.

Mr Jung said investors were looking for cues to when the Fed's next rate hike would take place.

On a weekly basis, the won looked set for a fourth straight week of gains.

South Korean shares reversed on profit-taking after finishing at a near 5-month high the prior day.

The Korea Composite Stock Price Index (KOSPI) was down 0.3 per cent at 2,016.99 points.

Foreign investors were expected to be buyers for eight straight sessions, purchasing a net 79.5 billion Korean won (S$94.1 million) worth of KOSPI shares.

Decliners outnumbered advancers 435 to 346.

Battery-maker Samsung SDI Co Ltd shares rose 2.8 per cent while carmaker Hyundai Motor Co was down 1.6 per cent.

The sub-index for iron, steel and metal was down 0.6 per cent as most steelmakers' shares declined.

June futures on three-year treasury bonds shed 0.04 point to 110.19.

REUTERS