Archived posting to the Leica Users Group, 2008/10/22
[Author Prev] [Author Next] [Thread Prev] [Thread Next] [Author Index] [Topic Index] [Home] [Search]Companies will change prices depending on what the market will bear. When the dollar was falling, many exporters of discretionary goods, like Leica, did not raise prices initially, choosing to eat the exchange rate fluctuation in the form of lower margin. Eventually the decline of the dollar was so steep and so prolonged that it had no choice but to raise US prices. Now the dollar is strengthening again, but at its current rate of around $1.28 it is exactly back at the level of 2 years ago, when the M8 was launched. Whether Leica chooses to lower its US price depends on how it perceives demand in the US market to be more than anything else. Either way, the recent strengthening of the dollar is obviously good news for a company like Leica whose costs are all denominated in Euro and for whom the US is a significant export market. It is also good news for countries like Saudi Arabia, Iran, Venezuela etc., whose oil exports are denominated in USD. Nathan Nathan Wajsman Alicante, Spain http://www.frozenlight.eu http://www.greatpix.eu http://www.nathanfoto.com Books: http://www.blurb.com/bookstore/search?search=wajsman&x=0&y=0 PICTURE OF THE WEEK: http://www.fotocycle.dk/paws Blog: http://www.fotocycle.dk/blog On Oct 23, 2008, at 5:09 AM, Frank Filippone wrote: > It is the "ratcheting" effect.... > > Dollar goes down, so European companies price in Euros, and > therefore the > item becomes more expensive in Dollars. Dollar recovers, they price > in > Dollars... repatriating more Euros.... > > Happens all the time..... > > Or, if you prefer, the part of the price that is dependent on the > exchange > rate, is recalculated only once or twice a year ( especially when > the dollar > is rising). It is not time now, so we'll have to wait and see..... > > > Frank Filippone > red735i@earthlink.net > > > > > > _______________________________________________ > Leica Users Group. > See http://leica-users.org/mailman/listinfo/lug for more information