We have learned that currency can have effect on consumers' behavior. For people in countries with high valued currency compared to the currently low US dollars, it is a great opportunity to visit the US. The article above is an example of how great it is for Canadian Hockey Teams in N.H.L when their Canadian dollar value rises strongly compared to the US dollar; how poor and weak teams can turn out to be rich.
"A stronger currency has made it cheaper for the six Canadian teams to pay their players in United States dollars and to reduce debts...
The revenues for the six Canadian clubs helped the entire league earn its highest operating profit in more than a decade, according to Forbes magazine."
Imagine how powerful a change in currency exchange rate can have in society. I expect that the US net export of the coming year will be boosted.
I agree that net exports will increase, but i wonder how much it will be from lower imports. Since it is a lot more expensive for the US to import goods from other countries who haven't had that big of a depreciation in their currency. Also, given that the manufacturing industry in the US has been shrinking (think about autos) I question how quickly producers could export if the demand were present.
ReplyDeleteThe current exchange rate of US dollar is of big benefits to many European union, Canada and the Australia. This will make their import price less and hence the US goods will be cheap in their market. But the question is how is the US dollar doing relative to the other currencies. Is this too low?
ReplyDeleteIf it is then others will grow at the expense of US economy. This is probably a right time to expand some fiscal policies and make dollar stronger in the world market!
According to this article, the appreciation of Canadian dollar helps 6 N.H.L teams to pay their players in US and reduce debt. The effect of appreciation of dollars can be shown in other areas, such as export and import. Compared to Canadian dollar, US dollar is worth less than before. So this will make Canada import more goods from US.
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