Friday, January 23, 2004
'Almighty dollar' indeed
What I know about the foreign currency markets is limited but deeply personal: On a good day, I'm getting around 80 euro cents for every dollar I spend here. It goes like this: Look at the price in euros, add twenty percent, and even that Turkish pizza I ate last night sets me back $2.54.
It's been my luck to move to Europe at the same time the dollar has hit record lows against the euro, around $1.29 a couple of weeks ago. Thus, I've become an obsessive watcher of the "forex" markets, checking the rate on the Economist.com even before I check my e-mail in the morning. My pre-paid mobile has a conversion function, and each morning I dutifully punch in the new rate and recalculate my major expenses. My stay at the bed-and-breakfast now costs $175.43 per week; it cost closer to $168 when the dollar briefly "rallied" last week and dropped to $1.21.
My forced education in the vagaries of the currency markets has taught me that U.S. exporters like a strong euro, because they pay their widget-makers in dollars (or pesos, more likely) and get more money for the same price when they sell these widgets in Europe. As I see my expenses increase with each bump of the euro, they see their margins rise without having lifted a finger. Not a bad result in the midst of an economic recession in which policy-makers want to spur growth however possible. European exporters, on the other hand, are hit hard. That Porsche manufactured over here just became more expensive to sell in the States, forcing retailers to raise their prices or just suck it up and wait for the dollar to start pulling its weight. But when were we ones to care about Europe in George W. Bush's America?
Then there's the skittishness in anticipation of the G7 meeting in Florida early next month, and the question of European interest rates and whether they've been cut enough (Americans say no, which drags down the dollar by making European investments more attractive). The diviners seem to think the Europeans will wait until the euro hits $1.30 before they start "jawboning" and drive the euro back down.
Meanwhile, American officials remain mum, the bastards.
Lost in the mix are poor, penniless expats trying to live on dollars in an all-euro world. I'm spared the embarassment of my currency being valued at 50 times the local notes (as in the Philippines) or 40 times the local notes (Thailand). It's easy to feel self-conscious in such riches. Here, on the other hand, I look in the cozy livingrooms of my neighbors on Vivienstraat in their 700,000 euro homes and feel decidedly "other." I wonder if they know they are living an embrassment of riches?
It's been my luck to move to Europe at the same time the dollar has hit record lows against the euro, around $1.29 a couple of weeks ago. Thus, I've become an obsessive watcher of the "forex" markets, checking the rate on the Economist.com even before I check my e-mail in the morning. My pre-paid mobile has a conversion function, and each morning I dutifully punch in the new rate and recalculate my major expenses. My stay at the bed-and-breakfast now costs $175.43 per week; it cost closer to $168 when the dollar briefly "rallied" last week and dropped to $1.21.
My forced education in the vagaries of the currency markets has taught me that U.S. exporters like a strong euro, because they pay their widget-makers in dollars (or pesos, more likely) and get more money for the same price when they sell these widgets in Europe. As I see my expenses increase with each bump of the euro, they see their margins rise without having lifted a finger. Not a bad result in the midst of an economic recession in which policy-makers want to spur growth however possible. European exporters, on the other hand, are hit hard. That Porsche manufactured over here just became more expensive to sell in the States, forcing retailers to raise their prices or just suck it up and wait for the dollar to start pulling its weight. But when were we ones to care about Europe in George W. Bush's America?
Then there's the skittishness in anticipation of the G7 meeting in Florida early next month, and the question of European interest rates and whether they've been cut enough (Americans say no, which drags down the dollar by making European investments more attractive). The diviners seem to think the Europeans will wait until the euro hits $1.30 before they start "jawboning" and drive the euro back down.
Meanwhile, American officials remain mum, the bastards.
Lost in the mix are poor, penniless expats trying to live on dollars in an all-euro world. I'm spared the embarassment of my currency being valued at 50 times the local notes (as in the Philippines) or 40 times the local notes (Thailand). It's easy to feel self-conscious in such riches. Here, on the other hand, I look in the cozy livingrooms of my neighbors on Vivienstraat in their 700,000 euro homes and feel decidedly "other." I wonder if they know they are living an embrassment of riches?
