How does the strong dollar affect U.S. consumers?
The ol’ dollar just isn’t what it used to be. It’s actually worth quite a bit more.
The value of the dollar has been rising steadily compared to other currencies. On Wednesday, the value of a euro fell to $1.05 — below $1.06 for the first time since 2003. Tuesday, the dollar hit its highest value against the Japanese yen in nearly eight years.
What does that mean for U.S. consumers?
For Bill Kendrick of Davis, California, it means cheaper supplies for his 1983 Atari computer. He has his eye on a cartridge that’s 20 percent cheaper than a similar one he bought several years ago, thanks to a better exchange rate.
American retailers who buy goods abroad will see a similar discount, but they might choose to pocket the savings instead of passing them along to their customers, says Dan Morris of TIAA-CREF Asset Management.
Now would also be a good time to vacation in Europe, says Boris Schlossberg at BK Asset Management. He said he has been surprised by the speed at which the dollar is rising, but he cautions that what goes up will eventually come back down. Today’s discounts won’t last forever.
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