Prague, 6 January 2004 (RFE/RL) -- Power Curbers has been selling its paving machinery abroad for 45 years.
But company Vice President Stephen Bullock says foreign sales were particularly good in 2004 for his North Carolina-based business.
"Our sales in Europe have been up 20-25 percent over the past year," Bullock says. "It's quite nice for us to have an increase in business in an area where business is not very good. Obviously, we have a significant price advantage over our European competitors during this time."
For three years, the dollar has fallen against major currencies, losing some 40 percent of its value against Europe's currency, the euro. The slide continued in 2004 as the dollar fell 7 percent against the euro.
For some, like U.S. exporters, the weak dollar is a welcome boost. But for others -- particularly in Europe, or those earning dollars outside America -- it's a headache.
"The biggest winner is obviously the U.S. manufacturing sector because they've experiencing a big gain in competitiveness as the dollar sinks against the euro currency," says Robin Bew, chief economist at the Economist Intelligence Unit in London.
Among the winners are consumers from countries whose currencies have strengthened against the dollar. They're finding U.S. products and holidays much cheaper.
In some of those countries, it's also affecting central bank decisions. That's because their stronger currencies can help slow inflation partly by making some key imports cheaper.
The Czech central bank governor said in December that the bank could hold off raising interest rates because of the strength of the Czech currency, the koruna.
And investors who put dollars into, say, euro-denominated investments also reaped a nice profit.
And it might be good news for governments and companies with large dollar debts.
But the weaker dollar has also caused problems.
It was at the root of a dispute over dollar-denominated gas prices that led Turkmenistan to cut off gas supplies to Russia and Ukraine in early January.
They had objected after Turkmenistan hiked the price of its gas. But Turkmen President Saparmurat Niyazov said the weaker dollar had forced the price increase.
"Of course there is no political motive behind this decision," Niyazov said. "During the talks we agreed that value of the dollar has lowered a little bit. Indeed, it has lowered by 35 percent."
But the biggest losers have been the countries that use the euro, known as the eurozone.
French winemakers rallied in December to draw attention to their industry's problems, including a falling dollar that makes their bottles pricier in the rich U.S. market.
Economist Bew says many eurozone companies have seen their profits fall as they cut prices in a bid to compete with the cheaper products of U.S. companies.
"There's no doubt it's been eurozone manufactures and exporters who've been the biggest losers because they're the ones who've seen their competitiveness in global markets being undermined the most," Bew says. "Economic performance in the eurozone has deteriorated on the back of this."
In recent months, several European policymakers have complained about the rise of the euro against the dollar.
It's raised the question of intervention -- where central banks sell or buy currency to influence the exchange rate level.
French Finance Minister Herve Gaymard warned in December of possible "economic catastrophe" unless the United States, Europe, and Asia work together to stop the dollar's fall.
Some Asian banks have intervened to keep their currencies from strengthening.
But experts say there's little likelihood of international coordinated intervention.
They say that's because the United States, despite official rhetoric to the contrary, is happy to see the benefits of the dollar's slide -- as long as it's gradual.
"The whole idea of intervention is not so much absolute levels, but the pace of the rise," says Ashraf Laidi, chief currency analyst at MG Financial Group in New York. "The euro is around 1.33 [to the dollar]. If we get to 1.40 on Friday [7 January], it's a big deal; but if we don't get there till two months time it's not a big deal. So there is no magic number that would spell intervention, it's the pace at which we get to these numbers."
For those who watched with dismay in December as the dollar hit an all-time low against the euro, this week brought some cheer.
The dollar rose to a four-week high to 1.3185 against the euro.
But company Vice President Stephen Bullock says foreign sales were particularly good in 2004 for his North Carolina-based business.
"Our sales in Europe have been up 20-25 percent over the past year," Bullock says. "It's quite nice for us to have an increase in business in an area where business is not very good. Obviously, we have a significant price advantage over our European competitors during this time."
For three years, the dollar has fallen against major currencies, losing some 40 percent of its value against Europe's currency, the euro. The slide continued in 2004 as the dollar fell 7 percent against the euro.
"The biggest winner is obviously the U.S. manufacturing sector, because they've experiencing a big gain in competitiveness as the dollar sinks against the euro currency." -- Robin Bew, chief economist at the Economist Intelligence Unit in London
For some, like U.S. exporters, the weak dollar is a welcome boost. But for others -- particularly in Europe, or those earning dollars outside America -- it's a headache.
"The biggest winner is obviously the U.S. manufacturing sector because they've experiencing a big gain in competitiveness as the dollar sinks against the euro currency," says Robin Bew, chief economist at the Economist Intelligence Unit in London.
Among the winners are consumers from countries whose currencies have strengthened against the dollar. They're finding U.S. products and holidays much cheaper.
In some of those countries, it's also affecting central bank decisions. That's because their stronger currencies can help slow inflation partly by making some key imports cheaper.
The Czech central bank governor said in December that the bank could hold off raising interest rates because of the strength of the Czech currency, the koruna.
And investors who put dollars into, say, euro-denominated investments also reaped a nice profit.
And it might be good news for governments and companies with large dollar debts.
But the weaker dollar has also caused problems.
It was at the root of a dispute over dollar-denominated gas prices that led Turkmenistan to cut off gas supplies to Russia and Ukraine in early January.
They had objected after Turkmenistan hiked the price of its gas. But Turkmen President Saparmurat Niyazov said the weaker dollar had forced the price increase.
"Of course there is no political motive behind this decision," Niyazov said. "During the talks we agreed that value of the dollar has lowered a little bit. Indeed, it has lowered by 35 percent."
But the biggest losers have been the countries that use the euro, known as the eurozone.
French winemakers rallied in December to draw attention to their industry's problems, including a falling dollar that makes their bottles pricier in the rich U.S. market.
Economist Bew says many eurozone companies have seen their profits fall as they cut prices in a bid to compete with the cheaper products of U.S. companies.
"There's no doubt it's been eurozone manufactures and exporters who've been the biggest losers because they're the ones who've seen their competitiveness in global markets being undermined the most," Bew says. "Economic performance in the eurozone has deteriorated on the back of this."
In recent months, several European policymakers have complained about the rise of the euro against the dollar.
It's raised the question of intervention -- where central banks sell or buy currency to influence the exchange rate level.
French Finance Minister Herve Gaymard warned in December of possible "economic catastrophe" unless the United States, Europe, and Asia work together to stop the dollar's fall.
Some Asian banks have intervened to keep their currencies from strengthening.
But experts say there's little likelihood of international coordinated intervention.
They say that's because the United States, despite official rhetoric to the contrary, is happy to see the benefits of the dollar's slide -- as long as it's gradual.
"The whole idea of intervention is not so much absolute levels, but the pace of the rise," says Ashraf Laidi, chief currency analyst at MG Financial Group in New York. "The euro is around 1.33 [to the dollar]. If we get to 1.40 on Friday [7 January], it's a big deal; but if we don't get there till two months time it's not a big deal. So there is no magic number that would spell intervention, it's the pace at which we get to these numbers."
For those who watched with dismay in December as the dollar hit an all-time low against the euro, this week brought some cheer.
The dollar rose to a four-week high to 1.3185 against the euro.
