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July 27, 2011 10:02 PM   Subscribe

Economics filter: I'm sitting on a lot of Korean won. I want to buy US dollars (practically, I'd do a wire transfer from my Korean bank acount to my US one). Given that the Republican Party might ruin the US economy out of sheer spite, how should I time this transfer to maximize my personal profit re: a beneficial exchange rate (weak USD, stable/strong-ish Korean won)?

Politically I'm sickened by what the GOP is trying to do to America buy hey, this is my situation. I get paid in South Korean currency and I'm wondering if the value of the US dollar is about to collapse, thereby allowing me to purchase many of them for cheap.

Should I do my wire transfer before or after August 2nd?
posted by bardic to Work & Money (7 answers total) 1 user marked this as a favorite
 
Well, if this graph is anything to go by, the longer you wait the more USD you'll get for your KRW.

If August 2nd comes around and the Republicans are still acting like children, then odds are that you'll probably get a really great rate the next day. But drawing a regression line, you'll probably do better, regardless.

If things got really bad, it's unlikely that Obama would allow any catastrophic Republican economic policy to continue well past the 2nd. Some kind of normalization would happen soon after that would slow, if not halt, any tanking of the currency.
posted by Blazecock Pileon at 10:10 PM on July 27, 2011


Similar discussion but wrt British pounds here.
posted by mvd at 12:05 AM on July 28, 2011


Timing the FX market is rarely a good strategy for the individual investor. Investment banks spend billions of dollars on computers that will execute this trade long before you even considered the idea. The current price of the dollar reflects the market's opinions on what will happen on August 2nd. If you need some dollars, buy them. If you don't need any dollars, don't buy them.

(Disclaimer: I work in the rates/fx department at a major investment bank.)
posted by jrockway at 12:34 AM on July 28, 2011


@jrockway
I believe only the first part of your statement


In general it is a good idea in uncertain times to have savings in two different currencies. Concerning the doomed dollar:
Kostolany, a famous Jewish-German-Hungarian investor, always said that he knew it was time to sell when his hair-cutter gave him stock investment advice. Currently everybody is advocating gold, noone is buying dollars. Hence, if you buy dollar you are 100% contrarian - not always the worst investment idea.
posted by yoyo_nyc at 2:33 AM on July 28, 2011


My long-term thinking is that I'm going to move back to the US in a few years and am trying to build up a bit of a fund, maybe for a house (OK, that's for another thread).

Typically I "buy" dollars once a year or so buy transferring funds from my Korean bank (won) to my American bank (USD). It's about that time of year again, and I was just wondering if I could game it to boost my earnings a bit.
posted by bardic at 2:38 AM on July 28, 2011


There is no way of prediction future moves in currencies. You could take the BicMac index as a hint, but is is only a hint. I would not move the money before 2nd of August because there might be a disruption in the currency markets.

One of my favorite finance blogs is bullish on the dollar.
posted by yoyo_nyc at 2:49 AM on July 28, 2011


I "buy" dollars once a year or so buy transferring funds from my Korean bank (won) to my American bank (USD).

If you are handling FX via your bank, you can probably get a better rate using a specialist FX broker. MeFiMail me for the brokers I use - I'm not putting them up here because I get a small (£25/$40) referral reward for every new customer I refer.
posted by Busy Old Fool at 3:14 AM on July 28, 2011


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