Tham khảo tài liệu 'currency strategy a practitioner's guide to currency trading, hedging and forecasting_2', tài chính - ngân hàng, ngân hàng - tín dụng phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 8 Currency Strategy 2002 it was around . Over the short term however the record of PPP is decidedly more patchy which is of course no consolation to London coffee lovers nor to our New Yorker guest Relative pricing can be further distorted by other factors such as barriers to trade and different cultural tastes. For instance some people may not like coffee while to others it may be against their religion. That said it holds true that the exchange rate is a key determining factor for how one defines expensive or cheap in the first place. The same premise is also evident at the corporate level. When the US dollar was appreciating to multi-year highs against European currencies during the period of 1999-2001 this together with the fact of strong US consumer demand made it very attractive for European manufacturers to export their production to the US at increasingly competitive prices. The strength of the US currency deflated the dollar price of these products thus making them more competitive and encouraging US consumers to buy more European goods. For US exporters however the picture was the opposite as their exports to Europe became less competitive as the dollar strengthened reducing their market share or pricing them out of some markets entirely. Thus the US trade deficit ballooned not just with Europe but with the world as a whole reaching a level of some USD400 billion in 2001. Yet just as the US trade deficit was expanding so more competitive exports to the US together with a slowdown in US demand in 2001 forced US manufacturers in turn to cut their prices reducing inflationary pressures. However as corporate executives are painfully aware just as domestic currency weakness can lead to more competitive exports and thus higher profits causing a benign circle so a vicious circle can result from domestic currency strength hurting one s export competitiveness. From the perspective of a European exporter a weak dollar is not a good thing as it causes the .
