However, as Eric Dor explains, we import a lot of goods quoted in dollars on international markets. Oil, metals (zinc, copper, nickel, etc.), agricultural raw materials (wheat, soybeans, corn, etc.) are all goods expressed in American currency. “Even if the price in dollars does not change, the price of these imported components increases in euros. So it’s negative, and that price is passed on to the consumer back home.”
Conversely, American consumers will be delighted to spend their holidays with us. Overnight stay at the hotel, restaurant, activities… all of this will be less expensive from their point of view. “For the same sum in euros, it will cost him less in dollars.“
What about companies?
Of course, this rise in commodity prices also affects businesses. “The depreciation of the euro against the dollar further aggravates the increase in costs for businesses. This undermines their profitability if they do not manage to pass on everything in increased selling prices.“, adds Eric Dor.
Most who says fall of the euro, also says increase in attractiveness in Belgium. Indeed, the price set in euros becomes cheaper once translated into dollars.
Goods and services exported by eurozone countries become cheaper in dollars
“So the goods and services exported by the countries of the euro zone, for the same price in euros, become cheaper in dollars. It is in this sense that it is said that it can improve the competitiveness of exporters in the euro zone.“
However, the positive impact remains limited for the majority of companies since they suffer from the increase in the cost of raw materials at the same time. “But for them, it would be even worse if the euro did not depreciate.“