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Skyblue
Joined: 02 Mar 2007
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 Posted: Fri Oct 08, 2010 7:07 pm Post subject: Currency Forecasts |
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What sites do you use to get good currency forecast information?
The won seems to be doing well right now: 1116 compared to 1200 to the dollar in the summer.
Anyone think it is starting to be a good time to sell won?
I'm actually looking to put it into CAD. I wonder if you know any forecasts related to these two currencies. |
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Vagabundo
Joined: 26 Aug 2010
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| Posted: Fri Oct 08, 2010 8:47 pm Post subject: Re: Currency Forecasts |
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| Skyblue wrote: |
What sites do you use to get good currency forecast information?
The won seems to be doing well right now: 1116 compared to 1200 to the dollar in the summer.
Anyone think it is starting to be a good time to sell won?
I'm actually looking to put it into CAD. I wonder if you know any forecasts related to these two currencies. |
the USD, barring something unexpected and shocking, will continue to lose value relative to every other world currency.
it will lose the LEAST value relative to the Korean won, continuing the pattern since 2007.
if you take a look at currency values, you will see most other currencies are either just at, just below, or above their 2007 highs vs the USD.
Korean won remains 12% plus below and they like it that way, there is already a lot of whining in the Korean English press about the "strong won".
Strong won = oxymoron.
you will see how "strong" the won is on your next vacation around Asia, especially its supposedly "poor" regions. |
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atwood
Joined: 26 Dec 2009
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| Posted: Fri Oct 08, 2010 8:58 pm Post subject: |
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Agree that a weak won is current Korean government policy. It's good for exports and the chaebols and bad for ordinary Koreans who pay the price due to inflation.
I wouldn't expect it to get much below 1100, if that. But with the currency markets, you never know. Juat ask all those Japanese housewives who caught it in the shorts. |
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Vagabundo
Joined: 26 Aug 2010
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| Posted: Fri Oct 08, 2010 9:20 pm Post subject: |
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| atwood wrote: |
Agree that a weak won is current Korean government policy. It's good for exports and the chaebols and bad for ordinary Koreans who pay the price due to inflation.
I wouldn't expect it to get much below 1100, if that. But with the currency markets, you never know. Juat ask all those Japanese housewives who caught it in the shorts. |
the currency exchange rate is one of three favorite reasons always employed by Koreans when they jack up prices on many consumer goods or food by 25-33% on at least a semi annual basis.
(along with oil prices and weather fluctuations)
agreed, there will be an awful of whining and screaming if the rate dips below 1100 |
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liveinkorea316
Joined: 20 Aug 2010
Location: South Korea
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| Posted: Sat Oct 09, 2010 8:26 am Post subject: |
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| atwood wrote: |
Agree that a weak won is current Korean government policy. It's good for exports and the chaebols and bad for ordinary Koreans who pay the price due to inflation.
I wouldn't expect it to get much below 1100, if that. But with the currency markets, you never know. Juat ask all those Japanese housewives who caught it in the shorts. |
It's been their policy for the last 50 years. |
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caribmon
Joined: 26 Oct 2009
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| Posted: Sat Oct 09, 2010 10:32 pm Post subject: |
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The Korean central bank recently noted that it is impossible to stop the USD falling so they will not try any more.
Look at Argentina. They are purposely devaluing their currency and are very successful at doing so. x-rate from 2.8-->4 in a few years.
Even worse is Vietnam but they have a trade deficit to fuel devaluation as well. x-rate from 12k->19k in 5 years
Western economies have too high of money supply ($30 trillion) for Asia to prop up with currency intervention especilaly 0good spelling0 when only China, Korea and Japan are interested in intervention. Those 3 economies total about 12 trillion - 15 trillion when you consider China's under reporting of GDP for years. Still not enough to prop up 30 trillion with growing deficits.
Look at what the Bank of Japan got with $25 billion in intervention: 82->86->82. They just lost $1.5 billion and will have to unwind that position at a greater loss in the future.
Nothing can stop non-producing, non-competitive, inefficient nations from having trade deficits and currency decline. You can never prop something up forever. Even China had to let its currency rise 30% in 5 years and it will rise more. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sat Oct 09, 2010 10:43 pm Post subject: |
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| liveinkorea316 wrote: |
| atwood wrote: |
Agree that a weak won is current Korean government policy. It's good for exports and the chaebols and bad for ordinary Koreans who pay the price due to inflation.
I wouldn't expect it to get much below 1100, if that. But with the currency markets, you never know. Juat ask all those Japanese housewives who caught it in the shorts. |
It's been their policy for the last 50 years. |
The won has been pretty strong in the past, all way down to 600 to the dollar. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sat Oct 09, 2010 10:47 pm Post subject: |
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| caribmon wrote: |
The Korean central bank recently noted that it is impossible to stop the USD falling so they will not try any more.
Look at Argentina. They are purposely devaluing their currency and are very successful at doing so. x-rate from 2.8-->4 in a few years.
Even worse is Vietnam but they have a trade deficit to fuel devaluation as well. x-rate from 12k->19k in 5 years
Western economies have too high of money supply ($30 trillion) for Asia to prop up with currency intervention especilaly 0good spelling0 when only China, Korea and Japan are interested in intervention. Those 3 economies total about 12 trillion - 15 trillion when you consider China's under reporting of GDP for years. Still not enough to prop up 30 trillion with growing deficits.
Look at what the Bank of Japan got with $25 billion in intervention: 82->86->82. They just lost $1.5 billion and will have to unwind that position at a greater loss in the future.
Nothing can stop non-producing, non-competitive, inefficient nations from having trade deficits and currency decline. You can never prop something up forever. Even China had to let its currency rise 30% in 5 years and it will rise more. |
Soros was just talking about this, saying that countries are all devaluing their currencies due to China's currency policy.
With G-20 coming up, I'm sure the Koreans are saying they're not going to intervene in the markets, but talk is cheap. |
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Lee Myung Bak
Joined: 25 Jun 2010
Location: Seoul
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| Posted: Sat Oct 09, 2010 11:24 pm Post subject: |
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| atwood wrote: |
| caribmon wrote: |
The Korean central bank recently noted that it is impossible to stop the USD falling so they will not try any more.
Look at Argentina. They are purposely devaluing their currency and are very successful at doing so. x-rate from 2.8-->4 in a few years.
Even worse is Vietnam but they have a trade deficit to fuel devaluation as well. x-rate from 12k->19k in 5 years
Western economies have too high of money supply ($30 trillion) for Asia to prop up with currency intervention especilaly 0good spelling0 when only China, Korea and Japan are interested in intervention. Those 3 economies total about 12 trillion - 15 trillion when you consider China's under reporting of GDP for years. Still not enough to prop up 30 trillion with growing deficits.
Look at what the Bank of Japan got with $25 billion in intervention: 82->86->82. They just lost $1.5 billion and will have to unwind that position at a greater loss in the future.
Nothing can stop non-producing, non-competitive, inefficient nations from having trade deficits and currency decline. You can never prop something up forever. Even China had to let its currency rise 30% in 5 years and it will rise more. |
Soros was just talking about this, saying that countries are all devaluing their currencies due to China's currency policy.
With G-20 coming up, I'm sure the Koreans are saying they're not going to intervene in the markets, but talk is cheap. |
True. The Bank of Korea intervenes but tries to be undercover about it, except traders notice a $500 million purchase of dollars, and some traders know what the BOK buyers look like. Usually the intervention is only suspected, but that's enough to shy some off buying the won for that day and stem the rise.
To support the export led economy and recovery they will try to keep the won undervalued because they have to compete with China who manipulates their currency and everything else so much. However, as other said, a floating currency cannot be held down forever. My year end prediction is 1065won per $1. Once the all important 1100 psychological threshold is breached, it will come down further easily. Of course this is barring any woes over the global economy. |
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liveinkorea316
Joined: 20 Aug 2010
Location: South Korea
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| Posted: Sat Oct 09, 2010 11:47 pm Post subject: |
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The bank of Korea can keep it's currency undervalued for as long as it wants. All it needs to do is print some Won then go into the market and buy some $US with that. This is a costless, risk-free activity that gives them hard currency US$ reserves and a lower exchange rate. There is no downside.
If Korea wanted to decrease it further or faster it could.
The Bank of Korea has a policy of a steady but very slowly increasing exchange rate. As long as the economy relies heavily on exports this is not going to be a problem |
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Lee Myung Bak
Joined: 25 Jun 2010
Location: Seoul
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| Posted: Sat Oct 09, 2010 11:59 pm Post subject: |
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| liveinkorea316 wrote: |
The bank of Korea can keep it's currency undervalued for as long as it wants. All it needs to do is print some Won then go into the market and buy some $US with that. This is a costless, risk-free activity that gives them hard currency US$ reserves and a lower exchange rate. There is no downside.
If Korea wanted to decrease it further or faster it could.
The Bank of Korea has a policy of a steady but very slowly increasing exchange rate. As long as the economy relies heavily on exports this is not going to be a problem |
I disagree on this. Sure there is no downside on keeping reserves, but unless Korea changes its monetary policy and makes the won a fixed currency then it can't "keep it's currency undervalued for as long as it wants." The won is a floating currency and the market determines the value. Sure intervention helps stem appreciation but look at what just happened with Japan, a large scale intervention being pointless. If there is enough volume buying won, then there is nothing the BOK can do, unless it wants to peg its currency. The Bank of Korea does not determine the exchange rates, only influences them at times. |
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aske
Joined: 25 Aug 2010
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| Posted: Sun Oct 10, 2010 12:22 am Post subject: |
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| Not to mention if they keep printing won it causes domestic inflation as well, making all that kim chi even more expensive. |
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waseige1
Joined: 09 Oct 2008
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| Posted: Sun Oct 10, 2010 12:24 am Post subject: ???? |
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| liveinkorea316 wrote: |
The bank of Korea can keep it's currency undervalued for as long as it wants. All it needs to do is print some Won then go into the market and buy some $US with that. This is a costless, risk-free activity that gives them hard currency US$ reserves and a lower exchange rate. There is no downside.
If Korea wanted to decrease it further or faster it could.
The Bank of Korea has a policy of a steady but very slowly increasing exchange rate. As long as the economy relies heavily on exports this is not going to be a problem |
I never understand this.... "The Government can just PRINT money".... OK someone, tell me how that is done.
They can print TBills. But they don't print money. EVER |
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liveinkorea316
Joined: 20 Aug 2010
Location: South Korea
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| Posted: Sun Oct 10, 2010 12:33 am Post subject: |
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Yeah they just print some more T-bills then exchange them for more $US. Its why they have more than $270 billion USD.
T-bills are as good as money to a bank. |
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liveinkorea316
Joined: 20 Aug 2010
Location: South Korea
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| Posted: Sun Oct 10, 2010 12:38 am Post subject: |
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It is definately impossible to keep a currency OVERVALUED as long as one wants. As was evidenced in the Asian Financial Crisis in 1998.
But Unvervaluing something is a different story. Think about the difference between maintaining a high value on a car versus lowering the value. I can think of plenty of ways to destroy the value of my car. I could keep doing it forever, each time someone came and offered me more money I would smash another window and light a torch under it again.
Yes it is defininately possible to continually devalue a currency through inflation. Have a look online. |
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