Exchange Rate Calculator

The exchange rate between the Canadian Dollar (CAD) and the South Korean Won (KRW) has experienced notable fluctuations over the past few months. This report provides an analysis of the CAD/KRW exchange rate trends, examining historical data, identifying key influencing factors, and offering insights into potential future movements.

Historical Exchange Rate Trends

Recent Performance (January to March 2025):

• January 2025: The CAD/KRW exchange rate began the year at 1,026.86 KRW per CAD on January 1, 2025. Throughout the month, the rate exhibited minor fluctuations, reaching a low of 995.54 KRW on January 30, 2025. The average exchange rate for January was approximately 1,010.05 KRW per CAD. (exchange-rates.org)

• February 2025: In February, the exchange rate remained relatively stable, with minor daily variations. The average rate hovered around 1,008.54 KRW per CAD, with the highest recorded rate being 1,022.40 KRW on February 20, 2025, and the lowest at 997.57 KRW on February 26, 2025. (investing.com)

• March 2025: March saw a slight upward trend in the exchange rate. By March 20, 2025, the rate reached 1,019.65 KRW per CAD, marking a modest increase from the previous month. The average exchange rate for March was approximately 1,015.06 KRW per CAD. (investing.com)

Performance in 2024:

• Throughout 2024, the CAD/KRW exchange rate experienced a gradual appreciation. The highest rate was recorded on December 31, 2024, at 1,027.15 KRW per CAD, while the lowest was 969.05 KRW on September 27, 2024. The average exchange rate for the year was 994.78 KRW per CAD, indicating a 5.10% increase over the year. (exchange-rates.org)

Factors Influencing the CAD/KRW Exchange Rate

Several factors have contributed to the fluctuations in the CAD/KRW exchange rate:

1. Economic Indicators:

• Canada: Economic growth, inflation rates, and employment figures in Canada influence the strength of the CAD. Positive economic data can lead to an appreciation of the CAD against other currencies, including the KRW.

• South Korea: Similarly, South Korea's economic performance, including GDP growth, export figures, and industrial production, affects the KRW's value. Strong economic indicators can bolster the KRW, leading to a depreciation of the CAD/KRW exchange rate.

1. Interest Rate Differentials:

• The interest rate policies of the Bank of Canada and the Bank of Korea play a crucial role. Higher interest rates in Canada relative to South Korea can attract investors seeking better returns, increasing demand for the CAD and appreciating its value against the KRW. Conversely, if South Korea offers higher interest rates, the KRW may strengthen.

1. Commodity Prices:

• Canada is a major exporter of commodities, particularly oil. Fluctuations in global commodity prices can impact the CAD's value. For instance, rising oil prices typically strengthen the CAD, as they improve Canada's trade balance.

1. Trade Relations:

• Bilateral trade between Canada and South Korea, as well as each country's trade relationships with other nations, can influence the exchange rate. Trade surpluses or deficits affect currency demand and supply dynamics.

1. Global Economic Events:

• Geopolitical events, global financial market trends, and economic crises can lead to risk aversion or risk appetite among investors, impacting currency values. For example, during periods of global uncertainty, investors may flock to safe-haven currencies, affecting the CAD/KRW exchange rate.

Future Outlook

Predicting future exchange rate movements involves considerable uncertainty due to the interplay of various factors. However, based on current trends and economic indicators:

• Canadian Economic Outlook: If Canada's economy continues to show robust growth, with stable inflation and employment figures, the Bank of Canada may consider tightening monetary policy, potentially leading to a stronger CAD.

• South Korean Economic Outlook: South Korea's export-driven economy is sensitive to global demand, particularly from major trading partners like China and the United States. A slowdown in global trade could weaken the KRW.

• Interest Rate Policies: Monitoring the interest rate decisions of both the Bank of Canada and the Bank of Korea will be crucial. Diverging monetary policies could lead to shifts in the exchange rate.

• Commodity Prices: Given Canada's reliance on commodity exports, particularly oil, any significant changes in global commodity prices will likely impact the CAD's value.

• Global Economic Conditions: Ongoing geopolitical tensions, trade negotiations, and global economic health will continue to influence investor sentiment and currency movements.

Conclusion

The CAD/KRW exchange rate has exhibited moderate volatility over the past few months, influenced by a complex array of economic indicators, interest rate differentials, commodity prices, trade relations, and global economic events. While recent trends show a slight appreciation of the CAD against the KRW, future movements will depend on the evolving economic landscapes of both Canada and South Korea, as well as broader global economic conditions. Stakeholders should remain vigilant, monitoring key economic indicators and central bank policies to make informed decisions regarding CAD/KRW transactions.