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For exporter nations, a weaker currency means that they don't need to charge as much in foreign nations for the equivalent value in the local currency. Let's t
by veyron 15y ago
For exporter nations, a weaker currency means that they don't need to charge as much in foreign nations for the equivalent value in the local currency.
Let's take porsche cars as an example. Porsche pegs a price in euros, and the price that US customers pays is the equivalent price in dollars (plus some extra fees, but those are generally negligible). A weaker euro means that 1 dollar is worth more euros, so that the dollar cost of the porsche to US customers is lower than it would have been otherwise.
On the other side, US exporters are hurt because the stronger dollar means that they have to charge more euros for items.
A similar issue exists between US and china
- junkbit 15y agoYes this is why Sony just announced big loses. All Japanese exports are getting more expensive in dollars http://www.google.co.uk//finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1321168013712&chddm=1755251&q=CURRENCY:JPYUSD&ntsp=0 http://www.google.co.uk//finance?chdnp=1&chdd=1&chds...
- parfe 15y agoSame happened with Nintendo. Largest losses in three decades. "Nintendo had a $690 million foreign exchange loss in the first six months of the fiscal year that began April 1, the company said." http://seattletimes.nwsource.com/html/businesstechnology/2016627275_nintendo28.html http://seattletimes.nwsource.com/html/businesstechnology/201...