Impact of Dollar Power on Importers
A US importer who owes and Belgian company 500,000 Euros payable in 30 days from today expects that the US Dollar will weaken during this period. What would you advise the importer to do? What would happen if the imported took your advice yet instead of the dollar weakening, the dollar actually strengthened?
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A strong and a weak dollar have different implications on importers. When a U.S. importer is expecting the dollar to weaken during a period where the importer has to pay a Belgian company 500,000 Euros debt, one of the advice is exchanging the U.S dollar amount of the debt into…
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