Recently I started paying more attention to exchange rates because my dad works in Korea and earns his salary in Korean won. When he sends money to the United States, we have to convert it into dollars. The same amount of money that looked normal in Korea suddenly felt smaller once it became dollars. His salary did not change, but the value of it changed the moment it crossed countries.
Seeing this made me realize how powerful currency is. It affects families, it affects countries, and it even affects the stock market.
The more I learned, the more I understood that this is not only a Korea and United States issue. Many countries around the world are dealing with a strong dollar right now. When the dollar becomes stronger, people in other countries need more of their own currency to buy the same amount of dollars. This affects everyday life and long term financial decisions.
The International Monetary Fund wrote that when the dollar rises by about ten percent, many developing economies can experience almost a two percent decrease in economic output. This helped me understand why a strong dollar can put pressure on countries like Korea that rely on manufacturing and exports. A strong dollar makes it harder for them to grow because their costs rise.
The World Bank also explained that a strong dollar makes imports more expensive, makes debt in dollars harder to pay back, and slows down investment from outside. That connected directly to my own family because when my dad sends money abroad every month, he feels the reality of that exchange rate. The salary amount is the same, but the dollar value he gets becomes smaller.
I began to wonder if foreign investors behave differently when the dollar is strong. According to a review from the Bank for International Settlements, investors often pull their money out of stock markets in other countries when the dollar rises. They move toward safer or more profitable places, and that movement can affect markets everywhere. This helped me understand why foreign investment in Korea sometimes falls during periods of a weak Korean won.
But currency movements are never simple. A weaker won can actually help certain Korean companies. Exporters get a boost because their products become cheaper for buyers overseas. Some Korean articles explained that businesses in manufacturing, electronics, and technology often benefit when the won is weaker because they become more competitive in global markets. So while families sending money abroad feel the pain, parts of the economy may gain strength at the same time.
I also wondered if it is a good idea for someone earning Korean won to invest in United States stocks right now. After thinking about it, I realized that timing the currency is almost as difficult as timing the stock market. Waiting for the perfect exchange rate might take months or even years. Even professionals get this wrong. A better approach might be to exchange smaller amounts regularly instead of trying to hit the best possible day.
Learning about currency made me see how connected everything is. Money does not move in only one direction. It interacts with families, companies, and entire countries. My dad’s situation showed me the personal side of it, and the research from places like the International Monetary Fund, the World Bank, and the Bank for International Settlements showed me the larger picture.
Sources and Examples
1. When the dollar gets stronger, other countries’ economies slow down
The International Monetary Fund(IMF) analyzed what happens when the dollar rises against other currencies.
The article explains that when the dollar increases by about 10 percent, many emerging market economies experience nearly a 1.9 percent drop in economic output.
https://www.imf.org/en/Blogs/Articles/2023/07/19/emerging-market-economies-bear-the-brunt-of-a-stronger-dollar
2. Why a strong dollar pressures emerging markets and families who send money abroad
The World Bank explains three ways a strong dollar affects developing countries.
It raises the cost of imports, makes debt more expensive, and slows investment from overseas.
https://blogs.worldbank.org/en/voices/three-ways-strong-dollar-impacts-emerging-markets
3. A strong dollar is not always bad: It sometimes helps exporters
Korean exporters sometimes benefit when the won weakens.
Their products become cheaper for foreign buyers, which can boost sales.
https://cm.asiae.co.kr/en/article/2025111008130468593
picture source :Econ Lowdown
What I learned
- Money changes value when it moves across borders.A strong dollar affects families, global investment, and the way countries grow.
- Some parts of a country benefit from a weaker currency while others struggle.
- Timing currency is almost impossible, so steady decisions can be smarter.
- Exchange rates are not just numbers. They are part of real life and real investing.
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