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TEXT OF STORY
Kai Ryssdal: Until recently, struggling American companies could count on making up lost profits by doing business overseas, a benefit of the weak dollar. Well, thanks to the credit crisis the value of the greenback has now shifted. Dramatically.
The good news is, our dollars will buy more these days. But the bad news is, that their dollars — whatever you call ’em — will buy less.
Here’s our senior business correspondent Bob Moon.
Bob Moon: As recently as July, a British pound would set you back more than two bucks. Today, it fell to its lowest level in five years — around $1.63. The 15-nation euro is also slumping. Shouldn’t we be celebrating that our greenbacks are now worth more? They’ll buy more oil and other vital commodities, all things being equal. But these days, all things are not equal.
Ashraf Laidi: A rising dollar in these economic conditions, in the current market turmoil, is not a good thing for the U.S. economy.
That’s Ashraf Laidi, who tracks currencies for CMC Markets. He points out our economy is tanking, too, and now it won’t be as easy to sell our goods and services overseas. And, the money American companies do make in currencies abroad won’t be worth as much.
Still, it could be worse. Robert Blake heads foreign exchange strategy at State Street Global.
Robert Blake: The dollar is still a lot lower against, in particular, European currencies than it was, say, at the start of 2002. So while we’ve regained lost ground in some respects relative to the past year or two, the dollar’s levels currently are not that abnormal or out of line.
Americans might normally take comfort in seeing the value of the dollar grow. But at Roth Capital Partners, Donald Straszheim says, at this point, it’s a mixed blessing.
Donald Straszheim: I would much rather have the currency be strong because U.S. growth was vibrant and our economy was competitive. Now, the currency is strong because, while we’ve been hurt by the credit crisis, other countries have been hurt even more.
Straszheim says that’s not the right reason to be happy about a rising currency.
In Los Angeles, I’m Bob Moon for Marketplace.
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