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Seoul: Won buckles under US dollar after Trump vows tax reform, stocks up
[SEOUL] The South Korean won fell to a one-week low early on Friday as the US dollar regained strength after US President Donald Trump said he would announce plans for tax reform, expected to reduce taxation for individuals and businesses.
The won stood at 1,152.2 as of 0216 GMT, down 0.6 per cent compared to Thursday's close of 1,145.8. It touched 1,154.5, its lowest since Feburary 2. The won was set to end the week down, snapping five consecutive weeks of gains.
"Every comment made by Trump is significantly affecting financial markets," said Park Sung-woo, a foreign exchange analyst at NH Futures.
Mr Park added that the investors are waiting for Donald Trump and Japanese Prime Minister Shinzo Abe's summit later in the day and US Federal Reserve Vice Chair Stanley Fischer's speech on Saturday, although bigger focus will be on the summit.
"The won's trading range will be 1,130-1,160 in coming week," Mr Park said.
Meanwhile, South Korean shares were largely supported by a strong Wall Street, buoyed by Mr Trump's comments on his tax plans.
The Korea Composite Stock Price Index (Kospi) was up 0.5 per cent at 2,076.77 points.
Offshore investors were set to be net sellers and sold 49.7 billion Korean won (S$61.4 million) worth of Kospi shares near mid-session.
Chipmaker SK Hynix lost 3.8 per cent on foreign selling.
LG Chem Ltd rose 2.5 per cent, and Lotte Fine Chemical Co Ltd 1.4 per cent, lifting the sub-index for chemicals more than 1 per cent.
Declining issues and advancing ones were almost even by 389 to 384.
March futures on three-year treasury bonds shed 0.05 point to 109.48.