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I am going to talk about relation between provocation and exchange rate.
I experienced some provocations from the North Korea and changing exchange rate.
So, I chose this topic.
There are contents.
I will talk about example of provocation first,
and the North Korea’s provocation and exchange rate.
This topic is consisted of cheon an ship issue and yeonpyeongdo issue.
Also, I will talk about the Iraq war and exchange rate.
And then conclusion about provocation and exchange rate.
There are two examples.
North Korea’s provocation and Iraq war.
These two provocations caused exchange fluctuations.
First, I am going to talk about relationship between the North Korea’s provocation and exchange rate.
The North Korea often provoked the South Korea using missiles or nuclear.
For example, When the South Korea Army trained with US Army, the North Korea provoked us by war threat. Also, they continued armed provocation. When the South Korea was threatened from the North Korea, exchange rate also changed.
There is an example.
This is the cheon an ship issue. It was caused by the North Korea. They attacked cheon an ship. It was a big issue at the South Korea. This issue might cause the war between the south Korea and the north Korea. At that time, exchange rate changed dramatically.
This is the exchange rate when we were attacked by the north Korea.
When you see on May, the Won which is the south Korea money as same as dollar increased per $1 1165 to per $1 1272.
Economic market considered the war, so won’s value decrease.
This is the second example of the north Korea.
This issue is Yeon Pyeong Do issue.
It was also armed provocation. Same situation as Cheon an ship issue.
When you see the exchange rate graph, exchange rate changed per $1 1137 to per $1 1159.
This exchange fluctuation also was considered by economic market.
Lastly, the Iraq war and exchange rate.
When you see the graph, left side is the South Korea’s money value.
The Iraq war caused on March to April.
Before on March, United states was threatened by the Iraq.
Economic market worried the war between united State and Iraq.
Therefore, USD’s value decreased.
When you see the red line on the graph, won value increased. per $1, 1340 to per $1, 1160.
It means USD value decreased because of the war Iraq.
As a result, provocation causes exchange fluctuation. The country where was threatened, that country’s money value may decrease.
Look at this picture, exchanged rate was influenced by every provocation.
Therefore, Provocation is related with exchange rate. When country face war risk, then country’s money value will decrease.