It was recently announced in a survey of institutional investors that the Korean Won was declared the most popular currency to invest in over the next 12 months. Over 47% of institutional investors preferred the Korean currency with 22% favoring the U.S. greenback putting the dollar second place. The Won is thought to be very stable and has risen to a new (4) four month high after increasing its reserves by over $4 billion reaching a total of almost $290 billion in September. This signifies that the country would easily be able to overcome any financial crisis in the near term. The International Monetary Fund (IMF) also recently commented positively on the country's economic outlook giving it a bright future.
The Korean economy is juxtaposed to its debt laden Asian counterpart—Japan. The Won recently rose 0.5 percent to reach 1,124.35 per dollar, the currency's highest level ever outperforming the dollar for nearly 7 straight days. Although it recently pulled back as a result of audit procedures designed to create more clarity, you can expect investors and capital to flow into the currency and country. The recent measures in improving auditing procedures will give investors more confidence. This will undoubtedly create additional lift to the Korean economy which is powered by strong exports.
Traders and hedge funds will take note of these measures and the upcoming volatility, which means you can expect them to aggressively trade and invest in the Won. This will enable Korea's currency to continue in an upward trend in relation to the U.S. dollar. The looming threat of quantitative easing in the United States by Federal Reserve Bank along with the protectionist actions from the Ministry of Finance might slow down the velocity of the Won's rise, but this will not keep it from hitting new highs.