The South Korean won that surged against the dollar in early Friday Asian trading lost ground after hitting a 3-month high of 1298.10 at 8:10 pm ET. Currently, the dollar-won pair is worth 1325.85, compared to Thursday's close of 1318.60. If the Korean currency falls further, it may likely target the 1362.3 level.

The Bank of Korea is forecasting the nation's economy will contract by 2.4 percent this year, what would be the first contraction in more than a decade. In a report issued today, the BoK forecast the economy would contract by 2.4 percent in 2009, a sharp change from the bank's December forecast of 2.0 percent growth. The bank said it expects GDP growth for 2010 to swing back to a positive 3.5 percent, led by a recovery in domestic and external demand.

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