Korean Job Discussion Forums

[Rapacious Mr. Batstove]

The New Zealand dollar vs the Korean Won has been steadily rising over the past few months. Currently $1NZD = 708KRW vs 630KRW in March

The NZ dollar has been very strong and consistent recently against major currencies ($1NZD = $0.87AUS is very high).

I'm no expert on financial matter like this but I'm curious. SO for people in the know, what is up with the WON right now and what can we expect the Korean economy doing in the foreseeable future with the USFTA deal taken into consideration? Is another Asian financial crisis on the way?

[OculisOrbis]

The Canadian dollar has been gaining value for a while now. The won to dollar exchange was great back in Feb, but it has since gone from 790W back in Feb to 870W now. That's about an 8% loss in 4.5 months. Not sure of any predicted actions.

The Can $ vs US $ is currently at its highest level in the past 30 years ($1us=$0.967CAN). A recent report from one of the major banks in Canada forecasts that the Can $ will continue to rise and they expect it to be on par with the US by the new year and well into the first quarter of '08. For perspective, the Canadian Dollar was worth $0.65 in 2003. It's now around $0.94. If my dollar continues to rise against the won, I am considering the possibility of exchanging to US$ because the Won seems to be strengthening against the US.

I haven't done the math on that, but I have a feeling I wouldn't realize any advantage over going from W to USD to CAD. If there were potential gains I have to assume they would likely be lost on the exchange fees. Anyone care to confirm for me so that I don't have to attempt any math?

Edit: I should also add that the KRW - CAD exchange is currently sitting exactly where it was when I arrived in Korea so I really have a zero loss from that baseline.

[joeyjoejoe]

it's not so much that the NZD or CAD or AUD are strong...it's that the USD is diving way way down and dragging the KRW with it.

i've lost about 10% on what i was expecting to send home by years end since arriving.
that sucks.


changing to USD would be a good idea, only if you kept your money in USD until a slightly less retarded government was in office and raised the value of the dollar back up to where it was only 12 months ago.

[YoshaMazov]

See, this is why it's so nice that we (being Americans...I know I'm rather ethnocentric) get paid in won. The exchange rate is amazing right now.

[Rapacious Mr. Batstove]

So, if I had say 5 Million won to do something with, what would be the best option in terms of saving?

Send it home or sit on it and wait for the exchange rate to come down?

[freethought]

ahh... currency, one of my beloved pass times.

I check numerous currencies daily, most of the time multiple times a day.

As for NZ, Canadian etc as compared to the won and greenback, the explanation can be found largely in the US economy and economic policies.

With the MASSIVE deficit the US has been racking up and a major change in the balance of trade, investment and financial markets have seen a major shift. Many people don't think their gov's policies make any difference, and when they hear that their government (provincial, state or federal) has a deficit, they don't understand or see the impact, since government is this big monolithic thing that has no impact on them. This is an impact.

As other countries are gaining in trade balance, and seen as having prudent (or at least more prudent than the US) policies for spending/government finance, they gain standing and are seen as good places to invest. Those nations gain investor and consumer confidence and see a rise in their stocks and currency. I can't think of a single currency that is doing 'poorly' against the greenback right now.

As for the Won and what all this means for those working in Korea, the FTA 'shock was felt' a bit, part of the reason that the exchange is what it is right now. When the deal was signed there was a drop. There'll be another drop when the agreement is re-signed, and another when it's ratified.

Another concern looming over the Won is the balance of trade is east asia, which is being shifted in china's favour. This will get complicated to predict as a korean companies begin/continue to set-up shop in china.

Though I can't say for sure, i would also think that those who play a role in currency exchange rates may also look at the two front runners for the next president of korea, and not like what they see.

All of these things are playing a role now, and are only likely to continue and grow more pronounced.

If you can get out before the new year, or at least move most of your cash out, you'd be advised to do so, since an upswing in currency values to what they were 6 months ago isn't likely.

[Rapacious Mr. Batstove]

Cheers freethought. Thats the sort of advice I was after. I'm pretty interested in how global currency markets are affected by different forces but my knowledge of economics is stuck back in high school, I like it whenpeople can explain to me simply.

[cbclark4]

Don't you also have to take into account consumer prices and inflation versus the same indicators for the dominant international currency?

[huffdaddy]

[Cheonmunka]

You have to ask a Kiwi with property in NZ that question. The exchange rates for deposits are now, today, 10% at the bank in NZ. They may be 11% tomorrow. But not nine. It's the highest rate in the Western world, including all of Europe, NA, Asia and most of SAmerica. You've got every man and his dog, including mutual funds from KB Bank going into fund NZD. The highest rate for 100K + in Korea is about 6.7 at the bank. There are billions held in NZ by foreign trusts and banks. (One reserve bank account had some 80 billion in it reserved for some deposit.)
The Reserve Bank raised the cash rate consecutively the last two years to ease inflation. The cash rate is, by and large, the interest rate at which the reserve bank lets the government borrow. It wants govt to stop spending.
This is why the exchange is unfavorable to us. The interest rates went up.
Pretty hard for some to get into property now. The government is also looking at doing away with tax rebates for those with property. So, it's getting tough.
The exchange was 724 won for a NZD tt today. Still, I believe the economy is strong enough to handle the currency.
The USD has been weak since 9/11 and all that that entailed. Sry guys. Hey, I bought your currency expecting a bounce back that never came.
I invested in the American Dream and lost.

[sojukettle]

Sydney Morning Herald (today: 22/6/07)......

The Australian dollar opened stronger today, chasing a 17-year peak after being spurred on by carry trade activity overnight.

At 7am, the domestic unit was trading at $US0.8473/75, up from yesterday's close of 0.8459/62.

It traded between a low of $US0.8440 and a high of 0.8474 during the overnight session, pushing up toward a 17-year high of $US0.8487, last posted on August 24, 1990.

Macquarie Bank associate director of foreign exchange Joanne Masters said the Australian dollar was boosted by investors chasing higher yields through carry trade.

A carry trade is where investors borrow low-yielding currencies, such as the Japanese yen, and lend high-yielding ones, such as the Australian dollar.

This tends to correlate with global financial and exchange rate stability.

The New Zealand dollar has also been gaining ground on the back of carry trade, yesterday hitting a post-float high of $US0.7658, before losing steam overnight to open at $US0.7630.

The Reserve Bank of New Zealand (RBNZ) has recently intervened in an attempt to curb the impact of carry trade on its currency, but has been largely ineffective in doing so.

Ms Masters said the RBNZ had intervened at least once this month, last week entering the market for the first time since the kiwi was floated in 1985.

The RBNZ is suspected of intervening again this week.

"Obviously we had that confirmed intervention last week, and suspected intervention this week but it hasn't halted the move in the kiwi," Ms Masters said.

"Possibly it's slowed the kiwi's rise but in terms of trying to introduce more two-way risk and stemmy some of these flows from carry trade it does seem to have been somewhat ineffective."

Ms Masters said that in the absence of any significant data, be it domestic or from offshore, it would most likely be a fairly quiet day of trade today.

"I think it's going to be a day of consolidation and if anything a continuation of the carry trade theme that we saw last night.

"(But) with the Aussie pushing up into fresh territory and the kiwi at those all-time highs the market might be a little bit hesitant going into the weekend ... so probably a very quiet 24 hours."

Ms Masters said the Australian dollar should receive support today around the $US0.8450 mark.

[willneverteachagain]

The Can $ vs US $ is currently at its highest level in the past 30 years ($1us=$0.967CAN)

[mrsquirrel]

Just now I have shares in UK FTSE 100 companies, an emerging markets fund and a Latin American fund.

Growth has been positive on all of them. The Latin American Funds are still going strong and look to make about 50% by year end.

There are a few funds which are based in Korea and have had very good write-ups on and look to perform very for the forseeable future.