Won rises but remains weak
Stars and Stripes March 5, 2009
The South Korean won rebounded slightly but remained at one of its lowest values against the dollar in 11 years after currency markets closed Tuesday.
The currency gained 18 won to rise to 1,552 to the dollar Tuesday after news of government intervention to prop up the currency, according to the Yonhap News Agency. The won fell Monday on the heels of the U.S. Dow Jones Industrial Average plummeting below 7,000. Most world markets followed the Dow’s dive.
The weak won means goods and services will continue to be a relative bargain for servicemembers paid in dollars. But it also means that the cost-of-living allowances servicemembers enjoyed when the won was stronger will not be back anytime soon.
The won has nose-dived since 2008 as investors have flocked out of South Korea’s comparatively less-developed economy. A year ago, the dollar bought about 950 won, about 600 fewer than it buys today.
Meanwhile, the Japanese yen barely budged at 97.65 to the dollar just before markets closed Tuesday.
The recent two-week dollar spike against the yen reverses months of steady decline. In August 2008, a dollar earned 110 yen, but it weakened steadily to the point where it was hovering around 87 yen just before Christmas, trickling upward to 90.54 yen on Feb. 12.
Japan’s currency has strengthened as investors have acquired yen while selling riskier investments worldwide.
However, the strong yen has crippled Japan’s economy as its companies struggle to sell exports such as electronics and vehicles, which are now more expensive in key consumer markets.