INTERNATIONAL. The Korean Won’s slippage against the Japanese Yen – and other currencies – highlighted October’s exclusive analysis of key travel retail currencies by The Moodie Report.
During the month, the Korean Won fell by -2.9% on average against the 11 other currencies in our basket. It fell -1.7% against the Chinese Yuan Renminbi, -4.2% against the Japanese Yen, -1.7% against the US Dollar, -1.5% against the Euro and -4.9% to the Australian Dollar. The top five destinations for South Korean outbound visitors in August 2003 were China, Japan, the US, Thailand, Europe and Oceania (defined as Guam, Australia and New Zealand).
While that spelled bad news for Korean travellers, the firming of the Yen against the Won was good news for South Korea’s duty free retailers. Japan represented 37.6% of inbound arrivals to South Korea for the first eight months of 2003 and represent the lion’s share of spending for downtown retailers such as Lotte Duty Free.
Now let’s look at the all-important Japanese Yen relationship against other currencies. Key changes for the month included a +2.5% rise against the Chinese Yuan Renminbi and the US Dollar (as of 5 November, the Yen stood at Â¥110 to the dollar, a slight easing over recent days), a +3.7% rise against the Swiss Franc and a +2.8% increase against the Euro.
The Australian Dollar and the Canadian Dollar were the strongest performers in our currency basket for the month. The Australian Dollar gained +2.8% on average against the basket – bad news for Australian retailers, good news for Australian travellers. Even the Yen slipped (-0.9%) against the Australian Dollar. The Canadian Dollar advanced +2.0% against the basket and, critically for the North American duty free trade, rose +2.6% against the US dollar. The Brazilian Real rose +1.5% against the US Dollar. The Russian Rouble also held up well, gaining +1.4% against the basket and +2.0% on the US dollar (and therefore the UAE Dirham).
For the period January-October inclusive, the Japanese Yen has gained +9.0% on the US dollar, a key dynamic in the global travel retail business and particularly important in locations such as Hawaii and other DFS strongholds. It’s also important for dollar-linked currencies such as those of China and the UAE.
But the Yen has fallen sharply against the Australian and Canadian Dollars this year (-12.6% and -9.0%, respectively) and -12.3% against the Brazilian Real. The latter has gained +24.2% against the US Dollar this year, while the Canadian Dollar has risen +19.8% against the greenback – strong encouragement for cross-border shopping, at least by Canadians.
