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afsjesse
Joined: 23 Sep 2007
Location: Kickin' it in 'Kato town.
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 Posted: Mon Mar 24, 2008 1:46 am Post subject: $$$$$$$ decision! |
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| So I'm banking 2m won per month and am saving it up for a few months in SE Asia. But im wondering if changing it to USD is a good thing.... I'm contemplating buying a stable currency, such as the YEN of Swiss Francs. The won is going to fall some time here, and the dollar is going to go down also, so which currency show's the best return? |
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fortysixyou
Joined: 08 Jun 2006
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| Posted: Mon Mar 24, 2008 1:57 am Post subject: |
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I'm in the exact same position. I'm saving 6 months for a SE Asia Tour Extravaganza. What is the best way to save it? Leave it as won? Change it to Rupees? Buy gold? Invest in diamonds?
Any helpful suggestions are greatly appreciated, as I know fuckall about financial planning. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Mon Mar 24, 2008 2:00 am Post subject: |
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| Anyone who says they know which way the won or dollar is going to go doesn't know what they are talking about. If they knew, they sure as hell wouldn't be here in Korea teaching English. |
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bogey666
Joined: 17 Mar 2008
Location: Korea, the ass free zone
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| Posted: Mon Mar 24, 2008 2:14 am Post subject: Re: $$$$$$$ decision! |
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| afsjesse wrote: |
| So I'm banking 2m won per month and am saving it up for a few months in SE Asia. But im wondering if changing it to USD is a good thing.... I'm contemplating buying a stable currency, such as the YEN of Swiss Francs. The won is going to fall some time here, and the dollar is going to go down also, so which currency show's the best return? |
I can give you some educated guesses having worked in the financial markets for quite some time, but even then it's only an educated guess.
Anyone that REALLY knew wouldn't be working at all, and instead would lounging around on some tropical island paradise with young maidens feeding him grapes all day long and fanning him in the shade as needed 
first of all... unless something BIG happens you're talking about currency fluctuations of probably 10% or less.. (even in something as volatile as the won) so frankly if 10% make a BIG difference in your travel budget.. off the bat I'd say it's time to reexamine your budget... save more.. etc.
second of all - conversion especially short term won't help you much because as a non institutional customer.. the banks are going to RIP YOU OFF in a big way (often giving you say 85-90% of the going spot interbank rate)
currency exchanges, etc might rip you off even more.
so frankly, it's just a nonstarter issue.. unless you're talking about long term savings.. etc.
the won will stabilize as the US markets stabilize (and after the Fed opening up the discount window to investment bank and guaranteeing Bear Stearn's assets in its sale to JPM - I think the US markets will stabilize.
there may be more bumps on the road.. but there's a decent chance the worst is over.. and if it's not (still possible) the Korean Central Bank recently made it clear by not only words but deeds that they will intervene in order to support their currency (they basically don't want too sharp moves in either direction)
I'd say just view the current rate of 1000 to 1 as more or less where things are likely to stay..
it may strengthen back down in the 900 range.... but it may not.
I don't know if I did I'd be on the island.
Yen and Franc are also strong recipients of the recent turmoil and "carry trade" currencies.
if thing calm down, they will fall (and I suspect they will short term) |
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moosehead
Joined: 05 May 2007
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| Posted: Mon Mar 24, 2008 4:26 am Post subject: |
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the Euro is reported to be quite stable and even beginning to outshine the dollar.
it's important to note this is an election year in the U.S. first of all, and secondly, it's an outgoing Republican admin. In the past, these kinds of circumstances have led to a slow period up until the time of the election to see who is going into office - a Dem admin will lean towards more spending, whereas a Rep will lean towards tax cuts.
I'm facing the same situation myself as far as where to put the cash. I'm banking on the Euro, I think. It's my understanding we can open accounts at our banks in certain currencies, euros being one.
*and don't forget advice is worth only what you paid for it  |
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bogey666
Joined: 17 Mar 2008
Location: Korea, the ass free zone
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| Posted: Mon Mar 24, 2008 4:45 am Post subject: the euro issue |
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may be the thorniest of all, since unlike the carry trade currencies and developing country currencies, it sings a different tune of its own.
short term, I'd be inclined to buy the euro vs all the other currencies mentioned (like yen, franc)
but vis a vis the US dollar I'm not sure.
It's a bit overstretched..
also depends on your time horizon.
if you can open accounts in ANY currency, then by all means diversify!
however.. when and how will you convert back to the US or Canadian dollar?
and at what rate? as I said... only large institutional customers will get an exchange rate at anything close to the interbank rate.
as a "tourist" or small fish you will be "fried" 10% or more on the exchange rate back to dollars (or vice versa)
basically the euro/dollar rate is now beholden to where you think the US is in terms of possibly bottoming out of the banking crisis.
if the Fed has to print money in order to prevent the financial system from failing, then indeed the dollar can have quite a lot of downside.
but the Euro is now approaching levels where their exporters will be hurting big time (and Europe will in no way be immune to a diaster on our shores)
in fact.. the housing markets in Spain and Ireland have become probably even more preposterously overpriced than the one in the US. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Mon Mar 24, 2008 5:03 am Post subject: Re: the euro issue |
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| bogey666 wrote: |
as a "tourist" or small fish you will be "fried" 10% or more on the exchange rate back to dollars (or vice versa) |
I agree with everything you say except this. For major currencies, the wire transfer rate is +/-1% of spot. Which you can get when you move Won into a foreign currency account. The cash transfer rate is +/-2% of spot.
Also note that the G7 may possibly intervene to raise the dollar.
From Bloomberg:
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| Even with the latest gain against the euro, strategists at Deutsche Bank AG in Frankfurt, the world's biggest currency trader, say the dollar is likely to fall to $1.60 versus Europe's common currency, from $1.5428 as of 7:49 a.m. in New York, because of a recession. Royal Bank of Scotland Group Plc, the fourth-largest trader, says the risk of intervention is increasing and ``would become severe'' if the dollar depreciates below $1.60. |
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bogey666
Joined: 17 Mar 2008
Location: Korea, the ass free zone
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| Posted: Tue Mar 25, 2008 3:08 am Post subject: Re: the euro issue |
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| huffdaddy wrote: |
| bogey666 wrote: |
as a "tourist" or small fish you will be "fried" 10% or more on the exchange rate back to dollars (or vice versa) |
I agree with everything you say except this. For major currencies, the wire transfer rate is +/-1% of spot. Which you can get when you move Won into a foreign currency account. The cash transfer rate is +/-2% of spot.
Also note that the G7 may possibly intervene to raise the dollar.
From Bloomberg:
| Quote: |
| Even with the latest gain against the euro, strategists at Deutsche Bank AG in Frankfurt, the world's biggest currency trader, say the dollar is likely to fall to $1.60 versus Europe's common currency, from $1.5428 as of 7:49 a.m. in New York, because of a recession. Royal Bank of Scotland Group Plc, the fourth-largest trader, says the risk of intervention is increasing and ``would become severe'' if the dollar depreciates below $1.60. |
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that's sweet if that's the "vigorish" (2%) and if you can set up foreign currency accounts without a problem.
re intervention.
that will only happen if dollar goes into a freefall. Then there will probably be come coordinated intervention. But given the stock rebound in US, no freefall will happen and the dollar will strengthen (though far more vs yen, and franc than the euro) |
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rsmm0224
Joined: 06 Feb 2008
Location: Changwon
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| Posted: Tue Mar 25, 2008 4:28 am Post subject: |
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| I'm no econ major but I think anymore there is no immune currency. What happens in N. America affects Europe and Asia and vis-versa. Bottom line is, what are you going to be using over there? If its your trusty Visa-debit card, I would just put it in your own hometown bank and keep it in a CD till its time to go. |
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bassexpander
Joined: 13 Sep 2007
Location: Someplace you'd rather be.
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| Posted: Tue Mar 25, 2008 5:17 am Post subject: |
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| moosehead wrote: |
| the Euro is reported to be quite stable and even beginning to outshine the dollar. |
No, no..... don't buy Euro. Heck no! Why? Because Euro countries met just last month and just barely decided against economic actions to deflate it. The Euro is currently near it's peak, if it didn't peak already last week. After all that's happened in this past month, it's a good bet that they will begin to deflate it soon -- you don't want your money in Euro when that happens! Remember, when the Euro is so high compared to the dollar, it just kills certain areas of business in Europe. A lot of money starts flowing from Europe into other economies, and local businesses get killed by that. This is part of why they are seeking to deflate it.
DO NOT buy Euro now. And as was stated elsewhere, the banks here absolutely RAPE you on charges. It's so bad that they're under investigation for colluding on the rates they're charging local customers. I just read that in the Korea Herald last week.
Best option if you don't trust the won is to get your money transferred OUT of Korea, and play with it from home via the internet.
Read this about the Euro:
http://www.drudge.com/news/104936/france-says-euro-too-high
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TOKYO (AFP) -- French Finance Minister Christine Lagarde on Friday welcomed the European Central Bank's more cautious view of the economic outlook but said the euro was still too high for comfort.
Lagarde was in Japan to meet with her counterparts from the Group of Seven rich nations in the wake of intense market volatility due to the fallout from a slump in the US housing sector.
The ECB on Thursday left interest rates unchanged but bank president Jean-Claude Trichet underscored "unusually high" uncertainty about eurozone growth prospects, raising speculation of future rate cuts.
Lagarde, speaking to AFP after arriving in Tokyo, welcomed Trichet's statement, saying "it gives a more accurate appraisal of the economic situation as we see it."
"Considering the different interest rate cuts" in the United States "and what European Union members have said of their respective views on the economic situation in Europe, this is pretty logical," she said.
"We've repeated it for so many times that it's become convincing," she said.
The ECB on Thursday left its main rate at 4.0 percent despite a series of rate cuts in the United States in light of turmoil in the housing market in the world's largest economy.
Trichet's remarks caused a fall in the euro, with the single European currency trading Friday at 1.4495 dollars, slightly back from 1.50 dollars a week earlier.
The euro is "still probably at a high level and all of our exporters are telling us that, even at this level, it penalises them compared with those (companies) whose costs are in dollars," Lagarde said.
The euro is too strong "compared with other currencies like the dollar, yuan and yen, so it's not just a matter of looking at the euro against the dollar," she said.
"Taking into account the appraisals of the International Monetary Fund, the euro is still at a higher level than it ought to be in theory considering the economies of the European Union," she said.
A high currency hurts a country's exporters by making their goods more expensive overseas and reducing their repatriated profits.
This weekend's meeting of finance ministers and central bank chiefs from the Group of Seven rich nations is set to focus on a global response to the US subprime loan crisis that has battered markets around the world.
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afsjesse
Joined: 23 Sep 2007
Location: Kickin' it in 'Kato town.
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| Posted: Tue Mar 25, 2008 8:29 pm Post subject: |
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were back over 1000 to the USD now  good ol'e days are over i think. |
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