The Currency Drop Has a Silver Lining

Physician's Money Digest, January31 2004, Volume 11, Issue 2

The value of the American dollar appears to be diminishing. With a 26-year low against the British pound, a 30-year low against the Canadian dollar, and a record low against the Euro, the situation appears dire. But, like most things, there can be a plus side. A low dollar can mean profits for the American tourism industry, exports, and even the stock market.

Europeans see America as a cheap getaway location. The total number of foreign tourists was up 6.8% through April 2007, helping to improve America's trade deficit. And the number of tourists could exceed a record high this year. Exports have also been doing well, rising 11% between May 2006 and May 2007. Some corporations, and with them investors, have also benefited from the weak dollar due to strong overseas sales. Coca-Cola stock has experienced a 5-year high, and McDonalds' attains 65% of its profits from overseas.