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tfunk
Joined: 12 Aug 2006
Location: Dublin, Ireland
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 Posted: Sat May 09, 2009 6:49 pm Post subject: Getting the best from Won -> Euro currency rates? |
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Currently, the Won is picking up against the Euro and Dollar.
There are rumors that the Korean government might try to curb this as it means unfavorable trading conditions in the current economic climate.
Two questions:
1. If they try to control the Won -> Dollar conversion rate will that have a direct effect on the Won -> Euro conversion rate or are the two independent?
2. Will there be time to convert Won into Euro after the government make any policy changes or will the effect be immediate (will it be a case of waking up one morning and learning that the rate has changed overnight and it being too late to take advantage of favorable rates?). |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat May 09, 2009 8:48 pm Post subject: Re: Getting the best from Won -> Euro currency rates? |
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| 1. If they try to control the Won -> Dollar conversion rate will that have a direct effect on the Won -> Euro conversion rate or are the two independent? |
Yes. If the BOK takes action to devalue the won, it will sink against the Euro (provided the Euro doesn't have similar downward pressure at a similar time).
| Quote: |
| 2. Will there be time to convert Won into Euro after the government make any policy changes or will the effect be immediate (will it be a case of waking up one morning and learning that the rate has changed overnight and it being too late to take advantage of favorable rates?). |
The changes tend not to be sudden and the ROK economy is far too vulnerable for dramatic action by the BOK. Generally speaking, if you closely watch the rates, you should be able to see a pattern and act appropriately. But Uncle Kim up North could lob a few missiles or blow a bomb and the KRW will sink, temporarily. Or the ROK's housing bubble could finally explode and a wave of bank failures set it (which will happen at some point).
But FOREX is extremely difficult to manage. There are so many variables that change every day. There is no good advice to give here.
If you don't need to spend the money soon, there are other options available to you that will behave as an appreciating store of value. |
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