Dollar hits new low against the Euro
European edition, Thursday, September 13, 2007
The dollar hit a new low against the euro Wednesday amid speculation the U.S. Federal Reserve will lower interest rates as much as one-half a percentage point.
The euro peaked at $1.3889 in European trading Wednesday, up from the Tuesday New York high of $1.3832, and breaking the July 24 record of $1.3852, according to The Associated Press.
At U.S. military banks in Europe, a dollar bought .7051 euro cents on Wednesday.
Some Americans remained undaunted, while others expressed dismay.
Pfc. Bradford Smith of the 4th Battalion, 27th Field Artillery Regiment in Baumholder, Germany, isn’t worried much.
“It doesn’t affect how I do things,” Smith said. “You can either stay at home or spend more money to go out and experience things.”
For Staff Sgt. Josh Christensen of Bamberg, Germany’s 317th Maintenance Company, the rising rate isn’t an issue. “I go off post to buy a few things here and there, but I do most of my shopping at [Army and Air Force Exchange Service stores]. It’s easier and cheaper.
“It won’t affect me too much.”
Other servicemembers and retirees say otherwise.
Pfc. James Gaudio of the 40th Engineers’ Company C out of Baumholder says he’s pulled back on his spending.
“If I party, I tend to party here at the barracks,” said Gaudio, noting that his cost of living allowance — which is supposed to offset the weakness of the dollar — doesn’t cut it.
Chief Warrant Officer Gilberto Cruz, 51, of Puerto Rico, lives in Nuremberg and works at the nearest U.S. base in Vilseck, about an hour’s drive away. He said the weak dollar makes living on the economy hard.
“You have to come on post to do all your shopping,” he said. “I try to shop all the time on base and not buy anything on the economy. I used to buy beer and sodas off post but I don’t do it anymore.”
Civilian Army contractor Albert Colangelo, 48, from Aliquippa, Pa., said he doesn’t go out to German restaurants as often. “You have to learn to manage your money better,” he said.
Businesses catering to Americans also are following the exchange rate closely. Some of them say the weak dollar has had little impact on business.
Thorsten Orthmann, manager of the Sixt car rental office in Baumholder, said as the weekend nears his customers have other things on their minds than the weak dollar.
“They come in to rent a car and they don’t care about money,” Orthmann said. “Everybody wants a car on Friday.”
Laszlo Rozsa, who runs the Millennium Piercing and Tattoo shop outside Grafenwöhr’s Gate 1, said currency fluctuations have not affected his business.
“Close to paydays, on the first and 15th of the month, there are always more people,” he said.
However, while some Americans might not watch the dollar so closely during day-to-day spending, those planning vacations are keeping close tabs.
Travelers are not taking as many short-notice trips but rather are going on one, big trip a year that offers advance bookings and payment plans, said Birgit Freyler, assistant manager at Ramstein Tickets and Tours.
The RTT staff offers steps travelers can take to limit effects of the weakened dollar, such as using payment plans or booking all-inclusive packages that take care of many expenses that otherwise would be paid with weaker dollars during the trip.
Payment plans give travelers a chance to wait until the exchange rate improves to pay for their trips. “It’s an issue because the dollar has gone down so drastically,” Freyler said.
In England, where the pound gained slightly against the dollar Wednesday to $2.0323 from $2.0275, most Americans watch their spending.
“We have definitely suffered — big time,” said Michael Lyons, owner of Mildenhall Car Sales, outside of RAF Mildenhall. “Everybody is buying cars on base, probably from the lemon lot.”
Air Force Staff Sgt. Audrey Burrows, a records manager with the 48th Communications Squadron at RAF Lakenheath, lives 15 miles from the base and said she’ll continue to buy produce and clothing at local shops.
On the other hand, Senior Airman Sonya Snyder, from the RAF Mildenhall-based 352nd Maintenance Squadron, tends to stick to on-base shops, she said.
“It’s freaking expensive out there,” she said of the local economy.
Reporters John Vandiver, Seth Robson, Steve Mraz and Sean Kimmons contributed to this story.