As the Dollar Falls, Costs Go Up—and Not Just in the US

CURRENCY CORNER

Donald Trump has stated he wants a weaker dollar in order to make it cheaper to export US-made products. And he’s quite likely to get it. Indeed, the dollar is already down 10% against a basket of the world’s currencies since the start of the year.

In turn, that’s going to hit consumers and retirees hard—not just in America, but in places like Panama and Ecuador, where they use the US dollar.

For Americans who are living or retired to such countries, the impacts of a declining dollar will hit wallets and lifestyle. Basically, costs will go up.

Panama, for instance, imports a vast amount of consumer products from nondollar nations. Thus, as the dollar falls in value against other global currencies, prices for those items rise.

Fuel prices rise too, since oil is priced in dollars, so the cost of personal transportation will likely go up as well.

Real estate should do well, however. A weaker dollar means stronger foreign currencies, which means foreigners will have purchasing power in Panamanian real estate. Great for property owners looking to sell; bad for Americans looking to buy since foreign demand will push home prices higher in dollar terms.

Of course, Panama and Ecuador will still be cheaper than living in the US, but for anyone on a fixed income, the weakening dollar promises to pinch wallets increasingly hard with every additional decline.

How to protect yourself?

Convert some of your cash in euros or Swiss francs. Both will do well against a falling dollar. You can always convert back into dollars if you need them.

You can easily trade dollars for those currencies at Moneycorp, and then hold them in your account.

If you plan to make a large purchase in a foreign country sometime soon—for example, buying property in Europe—it might be a good time to convert your dollars. Sign up for a Moneycorp account and a specialist can advise you on that—and help you target a good rate.

—Jeff Opdyke

Own Foreign Currency at Home

You can own foreign currency directly from home with a Moneycorp account. And you’ll get a much better exchange rate than you’re likely to find at your bank. If you plan to travel or buy property overseas, you can also plan ahead and track exchange rates—buying foreign currencies when the dollar is strong—so that you get the best rate possible. Sign up for a FREE account here.

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