Wednesday, October 29, 2008

The Buck Is Back -- What Does It Mean For You?

I'm of the opinion that if you are a consumer of credit information, you should also be a consumer of economic information as well. The Wall Street Journal has an excellent story on the strengthening dollar -- and what it means for you. A stronger dollar impacts a host of things, including imported goods and travel. The question, of course, is how long the dollar can hold its own against other currencies.

From the story:

This reversal halts, at least temporarily, a longstanding bearish trend that had seen the greenback slide against major world currencies for much of this decade. Today's newfound strength has consequences for investors, consumers and travelers. A more robust dollar weakens the benefit of investing abroad, yet makes imports, commodities and even an overseas vacation more affordable.

"All those things that had been hurting the consumer have now reversed," because the stronger dollar is bringing down prices for oil and other commodities that had been pinching pocketbooks, says Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. Still, she notes, the dollar's rise "isn't because we're in a fabulous economy. It's for mechanical reasons, as so much money around the globe is rushing to safety."

If you don't have a subscription to the Wall Street Journal, you can read a free version of the story here (link).

If you do have a subscription to the Journal, you can view the article here (link).


The Lion said...

Ok first, I love that picture. Second, it is about time the dollar came back! I was a little worried there for a bit when Canadia up there was doing better than we were...scary times folks, scary times said...

We'll see just how long this rally lasts. The dollar has been in free fall for a long, long time. Secular bear market, baby.

Rose L said...

This is not good for me at all. I have a small business that sells a lot overseas. Actually more than 80% of our revenue comes from our overseas operations. Customers pay in Euros. We usually tack on something to the dollar value to hedge but we did not hedge enough and when they pay (usually 90 days... yes very slow AR overseas) we will barely break even. said...

Heya, Rose. Thanks for the perspective.

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