Exchange Rate Now!

This can be a good time to visit Albania.

In the late part of September 2009, the Albania Lek (ALL) has lost some 3 per cent against major currencies like the US Dollar. And while this information is good for tourist, Albanians are left with worry and panic on whether they themselves should switch their savings into the US Dollar or the Euro.

Currently, 1 UD Dollar (USD) is trading at 93 Albania Lek (Leke/ALL). Compared to just 2 weeks ago on 15th Sep 2009, 1 USD is trading was trading at about 91 Albania Lek. Albanians are now worrying if the trend of Albanian Leke (ALL) depreciation will continue.

The worst case scenario can happen when the Albanians themselves decide to switch (more…)

New Zealand is often viewed as a country with slow growth – where things are made or grown rather than an interesting country of bright ideas and high productivity. As such, the general consensus in the early 1990s is for the New Zealand Dollar (also known as the “Kiwi”) to continue a long term depreciation against currencies of more “interesting” origin, like the Japanese Yen, the US Dollar and even the Australian Dollar.

Indeed, between year 1996 – 2000, the New Zealand dollar depreciated from 1 USD = 1.41 NZD to an exchange rate of 1 USD = 2.5 NZD, a steep 44% decline. The depreciation trend has since reversed over the years. For a while, it seems like things are not as gloomy for the New Zealand Dollar as predicted – until the financial crisis which started in Oct 2008 rocked the stability of the New Zealand dollar again.

From a rate of 1 USD = 1.49 NZD just before the start of the financial crisis in Sep 2008, the New Zealand Dollar depreciated to 1 USD = 1.94 NZD in Feb 2009. This represents a Hugh swing of 35% drop in value of the New Zealand Dollar. Fortunately for most New Zealanders, their national currency has rebounded back to a current level of 1 US Dollar compared to 1.44 New Zealand Dollar.

While most currency and forex traders attribute this trading trend as consistent with other major currencies (where an increased risk appetite from a global economy recovery (more…)

The Japanese Yen gained strongly against the Euro as a result of the global financial crisis that started in Oct 2008. From the exchange rate of 1 Euro = 163 Japanese Yen in Aug 2008, the Euro depreciated against the Japanese Yen to a rate of 1 Euro = 118 Japanese Yen in Feb 2009. This represents a 28% decline in the value of Euro compared to the Japanese Yen.

Fortunately for most Europeans, the Euro has since appreciated against the Japanese Yen as concerns over the global financial crisis abated (1 Euro is now worth 136 Japanese Yen).  Good news of course for Europeans who want to travel to Japan or buy Japanese products, who will certainly hope that the trend of appreciation continues.

It is interesting to note how the Japanese Yen demonstrated itself to be a safe-haven investment in recent years. From the global financial crisis to the Jakarta bombing, global events that destabilise the financial markets always lead to an immediate appreciation of the Japanese Yen (and the US Dollar) against the Euro. This despite the fact that the Euro is the second most traded currency in the world, ahead of the Japanese Yen and just right behind the US Dollar. Evidently, Euro is still not the currency of choice for defensive investment.

One can argue that the Euro is a relatively newer currency and there are still some concerns on how the European Union is able to effectively work with member countries in terms of mapping out a suitable monetary policy. In addition, emerging competitors in the form of the Chinese Renminbi and the Indian Rupee offers forex participants more leverage on emerging markets, where investors will now turn to after the global financial crisis where confidence in the United States and Europe are shaken.

Therefore, while the Euro can continue the holiday up the appreciation chart against the Japanese Yen, it might be a tough call to forecast that the Euro may even surpass the Yen to levels seen before the global financial crisis –  at least not in the medium term. The global financial crisis in year 2008 has prompted most monetary authorities and sovereign wealth funds (SWF) to increase their reserves in the US Dollar and Japanese Yen, and it is unlikely that this big chunk of reserves will be released anytime soon.