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asmith
Joined: 18 Jun 2009
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 Posted: Mon Oct 12, 2009 4:33 pm Post subject: Keep Watching the Won |
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Today, it's at 1179.
It's slowly losing its value again.
By March, it will be devalued to 1500 to 1600 so that Koreans will be able to sell their stuff to cash-strapped Americans.
We aren't out of the woods. In fact, this nightmarish ride has barely begun.
Isn't the global economy a beautiful thing? |
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fortysixyou
Joined: 08 Jun 2006
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| Posted: Mon Oct 12, 2009 4:51 pm Post subject: |
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Dude, your blog is awesome but you've been saying this forever.
All I see is the won getting stronger against the dollar, i.e. the opposite of what you've been saying.
I could be wrong of course. Anyway, if that were the situation in March (1500, 1600), I'd be grateful that my current contract ends in February. Off to greener pastures go I.
(Greener pastures = anywhere but Korea) |
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yfb
Joined: 29 Jan 2009
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| Posted: Mon Oct 12, 2009 4:54 pm Post subject: |
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| I hate these topics, they always seem to jinx the exchange rate. |
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DWAEJIMORIGUKBAP
Joined: 28 May 2009
Location: Electron cloud
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| Posted: Mon Oct 12, 2009 5:27 pm Post subject: |
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| yfb wrote: |
| I hate these topics, they always seem to jinx the exchange rate. |
If asmith downs a shot of soju in Seoul does a banker go broke on Wall Street? |
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Pwillig
Joined: 26 Jan 2009
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| Posted: Mon Oct 12, 2009 5:39 pm Post subject: |
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| It's at 1168 at the moment. Down from yesterday's close at 1170. |
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xCustomx
Joined: 06 Jan 2006
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| Posted: Mon Oct 12, 2009 5:48 pm Post subject: |
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�The market is concerned that the central bank will smoothen the won movements and try to protect the 1,150 level,� said Kim Taewan, a trader at Daegu Bank in Seoul. �The currency is still undervalued, which is why it�s been attracting stock inflows.�
Daily Interventions
The won�s advance may be restricted to between 1,050 and 1,100 over the next six months as policy makers intervene to keep gains in check, Kim said. South Korean officials have been buying an average $500 million worth of U.S. currency daily in the past week to protect the 1,150 level, he added.
�We will take steps to stabilize the drastic won movements stemming from herd behavior,� the Ministry of Strategy and Finance said today in a report to parliament. |
The last time the government tried to prevent the won from depreciating last fall/winter, they failed miserably. The gov't spent at least $50 billion to try and slow the decline of the won, but what good did it do? It went from 950 to 1600 in about 5 months. I don't see how the government can keep spending money like this, unless they are just trying to boost their reserves. I think it's inevitable that the won reach 1100-1150, no matter what the gov't tries to do |
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TL
Joined: 30 Mar 2008
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| Posted: Tue Oct 13, 2009 3:27 pm Post subject: You mean the won is gaining strength? |
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| If you look at a graph between the two currencies over the past three months, it is evident that the Won has gotten stronger against the dollar. The dollar is actually falling in value against many currencies. |
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bassexpander
Joined: 13 Sep 2007
Location: Someplace you'd rather be.
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| Posted: Tue Oct 13, 2009 4:02 pm Post subject: Re: You mean the won is gaining strength? |
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| TL wrote: |
| If you look at a graph between the two currencies over the past three months, it is evident that the Won has gotten stronger against the dollar. The dollar is actually falling in value against many currencies. |
With as much money as Obama is spending to purchase a temporary recovery, the dollar all but has to drop like a rock. 1.5 trillion spent by him so far. |
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DaffyD73
Joined: 28 Nov 2007
Location: Planet Earth on the left
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| Posted: Tue Oct 13, 2009 4:36 pm Post subject: Re: Keep Watching the Won |
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| asmith wrote: |
Today, it's at 1179.
By March, it will be devalued to 1500 to 1600 so that Koreans will be able to sell their stuff to cash-strapped Americans.
We aren't out of the woods. In fact, this nightmarish ride has barely begun. |
Sorry but yes you are basing your assumptions on Xmas being very bad commercially this year - i agree - and therfore another run to safe haven currencies - yea i agree . But the USD as a safe currency - not like in the past. The won may get back up to 1350-1400 but the talk recently about the rumor that the oil producing countries want to diversify away from the USD is causing this Low USD at the moment as the demand is for the other main currencies of the YEN, Euro, and in part Gold. |
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Triban
Joined: 14 Jul 2009
Location: Suwon Station
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| Posted: Tue Oct 13, 2009 4:50 pm Post subject: |
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| I usually agree with you asmith, but not this time. The dollar is weakening and the won will become stronger, just like the other currencies. |
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Konglishman
Joined: 14 Sep 2007
Location: Nanjing
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| Posted: Tue Oct 13, 2009 5:06 pm Post subject: |
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| xCustomx wrote: |
| Quote: |
�The market is concerned that the central bank will smoothen the won movements and try to protect the 1,150 level,� said Kim Taewan, a trader at Daegu Bank in Seoul. �The currency is still undervalued, which is why it�s been attracting stock inflows.�
Daily Interventions
The won�s advance may be restricted to between 1,050 and 1,100 over the next six months as policy makers intervene to keep gains in check, Kim said. South Korean officials have been buying an average $500 million worth of U.S. currency daily in the past week to protect the 1,150 level, he added.
�We will take steps to stabilize the drastic won movements stemming from herd behavior,� the Ministry of Strategy and Finance said today in a report to parliament. |
The last time the government tried to prevent the won from depreciating last fall/winter, they failed miserably. The gov't spent at least $50 billion to try and slow the decline of the won, but what good did it do? It went from 950 to 1600 in about 5 months. I don't see how the government can keep spending money like this, unless they are just trying to boost their reserves. I think it's inevitable that the won reach 1100-1150, no matter what the gov't tries to do |
Actually, right now, the won is not declining. It is getting more valuable. The government is trying to keep the won undervalued to help protect the Korean economy. |
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redaxe
Joined: 01 Dec 2008
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| Posted: Tue Oct 13, 2009 6:07 pm Post subject: |
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| Look at the news, Asian central banks are so worried about the dollar depreciating that they've started buying up dollars to keep their own currencies from appreciating too much! |
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runthegauntlet
Joined: 02 Dec 2007
Location: the southlands.
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| Posted: Tue Oct 13, 2009 6:46 pm Post subject: |
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Oh, good, another asmith fear-mongering episode
We haven't had one of those in like...a week. |
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asmith
Joined: 18 Jun 2009
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| Posted: Tue Oct 13, 2009 6:57 pm Post subject: |
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| redaxe wrote: |
| Look at the news, Asian central banks are so worried about the dollar depreciating that they've started buying up dollars to keep their own currencies from appreciating too much! |
Bingo!
It's hard to sell a Santa Fe when you're asking 60 thousand dollars for it. |
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xCustomx
Joined: 06 Jan 2006
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| Posted: Tue Oct 13, 2009 7:47 pm Post subject: |
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| Konglishman wrote: |
Actually, right now, the won is not declining. It is getting more valuable. The government is trying to keep the won undervalued to help protect the Korean economy. |
I never said it was declining. My point was that last year the government tried to control the movement of its currency and failed. I don't see how they will succeed this time around (to keep the won from appreciating too much) |
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