The US dollar plunged to a record low against the Euro in April. This happened immediately after the economic growth figures for the U.S. were released by the U.S. Commerce Department reporting the weakest results in four years. The release of these figures has people worried that the United States is in danger of falling behind the rest of the world economically, especially with the USD losing over 3.1% to the Euro already this year. The USD low was partnered with a Euro high, reaching past its previous high in December of 2004, above $1.3680, for the first time ever.
Euro and USD extremes are going to have significant affects on trade within both Europe and the United States. Some groups are happy and are benefiting from the weakness of the dollar and the strength of the Euro, whereas others are losing large amounts of both money and business. A number of American exporters have gained significant amounts as a result of the weakness of the dollar; however one major U.S. business has suffered greatly due to these exchange rates. Walmart, who produces over 70% of their goods in China, is suffering due to the weakness of the dollar. The company has tried to find less pricey areas for production; however there is only so much they can do to battle the plummeting dollar.
Euro strength and dollar weakness are also affecting many European companies. The economy of the Eurozone is one that is export dependant. Under normal circumstances, export driven economies benefit from a weaker currency and typically hurt when the currency is too strong. With the rise of the Euro, European exporters and manufactures have much higher costs, which lead them to lose money unless they raise their prices, which most companies are reluctant to do.
It is not just European and American companies that are suffering from the prices of the USD and Euro. Any country that trades with either the United States or an EU nation is at risk for exchange rate fluctuations affecting their imports and/or exports.
Euro and USD extremes are going to have significant affects on trade within both Europe and the United States. Some groups are happy and are benefiting from the weakness of the dollar and the strength of the Euro, whereas others are losing large amounts of both money and business. A number of American exporters have gained significant amounts as a result of the weakness of the dollar; however one major U.S. business has suffered greatly due to these exchange rates. Walmart, who produces over 70% of their goods in China, is suffering due to the weakness of the dollar. The company has tried to find less pricey areas for production; however there is only so much they can do to battle the plummeting dollar.
Euro strength and dollar weakness are also affecting many European companies. The economy of the Eurozone is one that is export dependant. Under normal circumstances, export driven economies benefit from a weaker currency and typically hurt when the currency is too strong. With the rise of the Euro, European exporters and manufactures have much higher costs, which lead them to lose money unless they raise their prices, which most companies are reluctant to do.
It is not just European and American companies that are suffering from the prices of the USD and Euro. Any country that trades with either the United States or an EU nation is at risk for exchange rate fluctuations affecting their imports and/or exports.
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