Article / 14 July 2014 at 12:05 GMT

Saxo's World Cup final: Australia win, by a whisker

Former managing editor, / Saxo Bank
  • Australia outlast South Korea as forex helps propel them to victory
  • Forex, indices, GDP growth rates used to determine outcome
  • AsiaPac going from strength-to-strength

When: July 13

Metrics: Indices, Forex, GDP growth

Result: Australia win after decisive Bank of Korea intervention


It was an extremely tight and tense affair, but ultimately Australia sealed victory over their north Asia rivals South Korea to become Saxo's first ever World Cup winner, with forex tipping the balance in the Australians' favour.

On a GDP growth rate, South Korea undoubtedly had the upper hand with growth for this year and next year projected at respectively 3.5 and 4 percent. 

Australia's growth projections for the next two years were also highly competitive at 3 percent per year, but not quite in the same league as Korea where, despite a certain dependency on global trade appetite for goods produced by their large chaebols (family-run conglomerates), and where an indebted household sector and ageing population are concerns, the outlook is set fair, for now.

Australia's over-reliance meanwhile on resource-hungry China left them slightly vulnerable here and with high inflation pencilled in, a series of likely rate hikes from the Reserve Bank of Australia are likely to kick off in next year.

With the ball firmly in Australia's court, the commodity-driven economy duly responded with the  S&P/ASX 200 Index up 0.4 percent vs KOSPI 200 Index down 0.9 percent, a clear outperformance for Australian stocks. The index was driven by strong performance in particular at Qantas which enjoyed a gain of 6.6 percent on the news that the airliner is considering a demerger of its frequent flyer business.


Argentina's football fans celebrate a victory, but in Saxo's World Cup, Australia came out top. 
Photo: AndresRuffo \ Thinkstock

Forex decides

With everything to play for, that left forex as the decisive metric.

Korea's won has enjoyed something of a ride in recent weeks topping 1,000 to the dollar but, decisively as far as Saxo's World Cup was concerned, the Bank of Korea intervened Thursday to cut the growth forecast to 3.8 percent from 4 percent for this year (marginally out of kilter with our estimates above).

For the KRW, that was bad news, suffering its largest weekly drop since March to record a one percent fall since July 4, a 0.5 percent fall on the day (Friday), and its lowest since June 25. While the KRW is still riding very high, the intervention could not have come at a worse time leaving the field clear for the AUD to take advantage, and take the cup.

Some conclusions:

  • The random draw of the hat led to some genuine shocks seeing the likes of Germany, the US and Japan all bow out to less fancied opponents
  • An AsiaPac final may well hint at the shape of things to come economically
  • Despite some genuine surprises, the make-up of the knockout phases was largely consistent with genuinely well-developed economies, particularly as the competition progressed


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail