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Exchange Rate worries.
« on: March 28, 2012, 11:32:23 am »
Hey guys, just looking for some advice....

I'm hoping to wire transfer around 10 million KRW  home to Australia.

Bearing in mind I have another year left in Korea (more-or-less), looking at this chart of the $AU to the KRW -, if, hypothetically speaking, you were in the same boat as me,  would you gamble on the exchange rate improving and holding out another year OR,  wire the money back to Australia ASAP?

I'm aware that the graph indicates to go with the latter, but I'm hopeless at economics and number  so any tips would be appreciated

Thanks in advance. :) 

  • sheila
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    • November 23, 2009, 08:32:58 am
    • Gangnamgu, Seoul
Re: Exchange Rate worries.
« Reply #1 on: March 28, 2012, 12:00:50 pm »
I'd say if you've got that much money and you'll be here a year~ look around at banks here and find the one with the best interest rates for their savings plans. The rates are much better here compared to America and it may be the same for Australia.  The minimum time frame on those is 1 year but you can go longer. No taking it out until the end unless you want your interest rate to go down. Also, the won is expected to rise within the next year especially in the fourth quarter. Or you can take your chances here and invest. Go into the bank and see what they have to offer for that.

*Watch the news closely over the next few days... if North Korea decides to launch their satellite rocket or whatever it is, the rate is going to plummet immediately so make your decision carefully.
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  • fudoose
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    • May 17, 2010, 02:50:05 pm
    • korea
Re: Exchange Rate worries.
« Reply #2 on: March 29, 2012, 11:05:26 am »
The exchange rate between the two currencies is a product of the AUS/USD and KRW/USD so really there are a lot of different factors that affect the exchange rate.

How about narrowing the swings and sending half now and half in a years time?

  • bawaugh
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    • March 04, 2012, 08:49:30 pm
    • Geoje
Re: Exchange Rate worries.
« Reply #3 on: March 29, 2012, 02:59:37 pm »
People make money from foreign exchange buy either being the middle man, insider trading or being very smart or dumb luck.

I would advise regardless where you go that you look for decent rates,  I believe that there are specialist foreign exchange persons who may be able to give a better rate than the banks, although I do not know who would be able to give such a service from Korea.

In any case is Waygook a good place to get financial advice on Forex movements?. Even experts can lose big money in this market.

At the end of the day Waygook nor it's commentors can not forecast the moment of the Won.

P is pressure
V is volume
n is number of moles
R is the gas constant
T is the temperature

Re: Exchange Rate worries.
« Reply #4 on: March 29, 2012, 04:09:02 pm »
As I said when you asked this question in the other thread; it will either get better, get worse or stay the same.

Nobody knows, except for those with inside information. There could be windows where you might save 5-10%. I highlighted one in that thread where the NZ Reserve Bank purposely devalued the NZD, but the dollar was back to the market defined level within 72 hours.

There are people who do this stuff for a living and most of them don't last very long. The best ways to save yourself money are to try to save on transaction fees. I sent 8mil home via ATM and got utterly screwed. The one day limit was 5mil so I had to go back the next day to send the other 3mil, stinging me on 40K both times. The only people who make bank on forex are the banks.

  • flasyb
  • Hero of Waygookistan

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    • November 30, 2010, 12:10:03 pm
    • South Korea
Re: Exchange Rate worries.
« Reply #5 on: March 29, 2012, 07:08:29 pm »
Yeah it's a bad time to be an Australian in Korea at the moment when it comes to currency exchange from won to AUD. This is a chart showing how much the won has fallen against the AUD over the last 2 years.

The AUD's rise has been meteoric. My gf's brother (Australian) has been to Korea 3 times and left 3 times. He most recently left in February. He got $17,000 for 20,000,000won. He was devastated. The last time he was here, he got $23,000 for 20,000,000won. That was 2 or 3 years ago.

Another Australian friend thought that the Australian dollar "just had to fall" sometime and saved all her money for before she left Korea. Turns out it didn't have to fall at all and over the course of her 18months here, the won fell still further against the AUD and she lots hundreds if not around a thousand dollars - money she wouldn't have lost if she had simply transferred money home every month or two.

The best advice a non-expert like me can give you is just transfer money home over the course of the year quite steadily. That way it will average out. You won't hit a jackpot exchange rate but you won't lose too much either. The other option is to gamble which is all you'd be doing if you're not an expert in currency exchanges.

[Edit: The 5 year graph shows the fall of the won against the AUD even more clearly.]
« Last Edit: March 29, 2012, 07:10:43 pm by flasyb »
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Re: Exchange Rate worries.
« Reply #6 on: March 29, 2012, 10:42:22 pm »
Well, it's a like playing any game at the casino...that element of risk. Like another poster said, just send home a couple of payments throughout the year.  I send one at the 6th month mark and another at the end of my contract(severance included).  Cuts down on the transfer fees and as long as I get a semi-decent exchange rate, I'm satisfied.

Re: Exchange Rate worries.
« Reply #7 on: March 30, 2012, 07:46:47 am »
End of July has usually the highest rate for USD to KRW. As mentioned, AU is linked tot he USD to KRW. I only lost about three hundred dollars for 4,000,000 to dollars. I made $1,100 off the Euro crash back in 2008-2009. I switched all my money over to Euros when it was $1.15 to 1 euro. Then the exchange rate when up to $1.40 to 1 euro and I swapped it all back when I left.

  • w4z
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    • November 30, 2010, 10:12:55 am
    • USA
Re: Exchange Rate worries.
« Reply #8 on: March 30, 2012, 08:14:46 am »
The united States just cut off food aid to NK today or yesterday.  If you're only staying one more year, it might be a gamble.  You can sit around and wait for NK to hold SK hostage like they do every time some kind of aid is cut.  If they (NK) do it early, the won will recover by the end of your contract.  When NK starts spouting a bunch of threats, the won is going to take a hit.  It happens every time.  This is just from my personal analysis.  I am by no means an expert.

Re: Exchange Rate worries.
« Reply #9 on: March 30, 2012, 10:54:54 am »
Thanks for the advice guys.  You guys rule!

I decided to go with what Sheila said and put the money in a high interest savings account.
KEB are doing a 4.25% 'special'  with a 1 year minimum  time frame. I'm not sure how great that is compared to other banks in Korea, but, It'll do, and with 10 mil, it's not going to make much of a difference anyway....

I guess I'll be re-evaluating the situation in 1 year from now...crossing fingers the exchange rate improves for me by then.

Thanks again.

  • CellarDoor
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    • February 22, 2011, 04:25:08 pm
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Re: Exchange Rate worries.
« Reply #10 on: March 30, 2012, 11:39:31 am »
Hmm, yes the won is quite a bit lower than it was this time last year.  (I've got an app for that...) I've tried to send money home to America pretty consistently, but one of the times I sent it home was the very lowest day of the past 365 days (maybe longer)...  I was actually IN the States then on a visit, so I had to have cash and didn't have a lot of other options.

It'd be nice if the exchange rate improved, but I kinda don't see that happening.  I'm hoping for the end of July again, but we'll see.  The advice about the savings account looks good.  Do you have to be in Korea in person to close your account though?  I've got 11 months left on this second contract, and if it's a year minimum for KEB's savings account, I'm not quite sure how to deal with that.  The interest rate from KEB is way better than the lamer savings account I have back in America though... I oughta do something about the latter.

Re: Exchange Rate worries.
« Reply #11 on: March 30, 2012, 12:10:53 pm »
Yeah, your rate is similar to the one I have from KEB that's deposit savings. I recommend getting a deposit savings for your earnings this year. Not only can you earn interest on your previous savings account, but you can also have them deduct any amount of your choosing each month and earn a similar interest on that as well. The only catch is you can't touch the money in the account until your contracted time is over. I believe you can also designate how many months you want to have that kind of account. It's pretty flexible.

Also, people should always take things like elections into account when trying to gauge the exchange rate. Korea has 3 elections this year 4/11, 6/6 and some time in December(the 19th?) for the presidential election. Depending on which party takes control the market will change. Currently the Grand National Party has the presidency but judging by how many young people dislike Lee Myung Bak I think the DUP will have a chance. The DUP is anti-FTA from my understanding, so this could seriously affect the Won.