The US dollar is tumbling from one record low to the next - in stark contrast to the once-sickly euro and the British pound, which is at an 11-year high against the US currency.
The good news is that a weak dollar makes US products and holidays cheaper as well as imports like oil more affordable.
But there is a sting in the tail: Americans will buy less with their weak currency, hitting exporters all around the world.
And in a worst case scenario the US dollar could collapse, triggering a global economic crisis.
Should we worry about the currency turmoil? Have you been affected by the dollar weakness?
This debate is now closed. Read a selection of your comments below.
The following comments reflect the balance of opinion we have received so far:
I am a Malaysian student currently studying in the UK. As the Malaysian Ringgit is pegged to the American dollar, the Ringgit has been dragged down along with it (RM6=�1 Sept '03, RM7=�1 Jan '04). While doubtless Malaysian exporters are rejoicing, people like me (and our parents!) are about ready to don sackcloth. Pegging the Ringgit to a basket of currencies would ensure greater stability.
Thean See Xien, Sheffield, England
Yes, I've been affected as I too send money to my mother who lives in Norfolk. Because the dollar is low I have to send more.
Karen Ladson, NYC, USA
A weak dollar has not only bad effects on life in Europe: we enjoy the relative low petrol prices. When the euro was weak every one was crying that driving would become unpayable.
Annie, Germany
For me, the weakening dollar is great as I do my best to buy only American products and always within the US. Although a few people have said they will not travel here as a result of the Iraqi war, the numbers of Americans travelling within the US instead of going to Europe has skyrocketed along with Europeans willing to take advantage of the cheap rates. A weak dollar is a good thing for Americans in America and anyone wishing to visit!
Paula Coviello, Boston, USA
As an American about to go to Australia to study, this is really taking a toll. My expected expenses have risen by over 33% since I first estimated them last spring. Do I have to pay more for school just so Bush can have a chance at re-election? I wish he would stop manipulating the World economy for his selfish gain. Anyone but Bush in 2004!
R. Barbour, Los Angeles, USA
I have just bought a house in Cyprus. I am paid in $. If you had a choice of currencies for your mortgage which would you take?
Alan, Abu Dhabi
As an American, paid in USD, living in the UK - the only things that are more expensive are the rent and utilities - all the rest of our shopping I do online in US$. We used to spend a lot as "tourists" on lots of little things - souvenirs/eating out, etc.. (in pounds sterling)- but have stopped that completely to keep our money and spend it "back home".
P Carey, North Yorks, UK
 |  This dollar is killing me!  |
This dollar is killing me! I send money home to England every month and it's getting more and more expensive. I think the dollar is now caught up in its own inertia and is falling because it is falling. When I got here it was 1.42 - this represents a massive pay cut for me. Thanks a lot Greenspan.
Clem, NYC I'm going on holiday this month to Africa and will be changing hundreds of British Pounds into even more US Dollars. So that means I'm very happy, however, as I'm spending the dollar in countries such as South Africa where there has been appreciation against the US dollar does that mean things will be more expensive while i am out there or will the extra dollars I exchange from sterling outweigh this problem? Swings and round-a-bouts I think!
David Tod, Leeds, UK
I'm paid in US dollars since I work here. I spend my vacations in Europe....ouch!
Yusaf, New Hampshire, USA
Why should anyone worry? It is the reality of living on borrowed money catching up with the US after so many years. Even with a "free falling" dollar the US trade deficit has hit record highs again this year. This means the trade deficit is not due to exchange rates primarily but due to high demand for foreign products in the US and low demand for US products in the rest of the world. Letting the dollar drop into an abyss is not going to change that.
Ulf, Germany
The dollar fluctuation has no impact on the lives of half of the population of developing countries who live below poverty line having no shelter, no job, no food to eat, no water to drink, no hospitalization facility. They are even not concerned for second time meal of the day as they strongly believe that God who is the creator has already arranged it for them so they do not need to worry about that.
Dharm, Karachi, Pakistan
It would be great for us Brits if only we could a get a visa in triplicate, have our fingerprints, DNA, photographs, shoe sizes and family tree details taken in order that we can sit on an aircraft for three days waiting to take off so that we can visit that wonderful country and buy all their cheaper goods with our tourist dollars!!!
Mark H
I am on vacation in the UK and the weak dollar has meant I no longer have as much money to spend shopping as I hoped.
Basil Bakpa, Newark, USA
I live in America, and despite the falling dollar, the prices for goods in the stores hasn't changed. After all, it's pretty much only the Euro that's going up in price and there are lots of alternative sources for European Goods (China, Japan, Etc.) While its bad for Europe, its great for the rest of the world.
Mark Harm, United States
It is a good time to buy stock in US manufacturers - because the lower dollar means they can sell more abroad. It is not a good time for US citizens to take an European vacation.
Madeleine Dunn, New York, NY, USA Typical Government not knowing what the left hand and right hand are doing. Dollar is at a record low, encouraging tourism dollars, meanwhile the other hand (with the new measures and the removal of the visa waiver scheme) is making the US less attractive for those wanting to boost the US economy.
DJP, England
I'm away to the states this summer so I'm getting my dollars in now. I'll be having steaks for breakfast. Cheers Mr Bush!
Mark W, Falkirk
My concern is that a weakening dollar could make European and Asian good uncompetitive. The result may just be a global deflationary cycle. We have already seen the effect of deflation in Japan. Hopefully this will not happen.
Frank, London, UK
As a student dividing time between USA and Finland, and holding bank accounts in USA, yes, it's affecting me painfully! Scandinavia is expensive in the first place, and coupled with the exchange rate, to an American there's just no such thing as "cheap" in Europe, let alone here.
Catherine, Finland/USA
I went to NYC for a year when the Euro was very weak against the Dollar - it cost me a fortune getting started over there ... now that I've come back the Dollars I have with me aren't worth much. Let's hope the US elections held in autumn will see a Democrat come out as the winner - and also the European Central Bank will take measures to lower the Euro significantly.
Markus, Vienna, Austria
It is great to see some people benefiting from this but I sadly will not. I made a conscious decision since the whole Iraqi invasion (yes invasion!) never to purchase another American product or ever to visit the States again. I am not the only person like this and I am wondering how many others out there feel the same. I will not give my money to a country that has no regards for others and is on the take from everyone else the whole time. I have made a huge effort to buy as many European goods as possible in the past few months and at least I hope I am helping keep some of our own in employment.
Aileen Walshe, Ireland
My family and I had planned a trip to the UK for this March and it is going to cost us more than we had expected. It could be worse though: we saved a lot of money by getting plane tickets when BA was having a sale and we just booked hotel rooms when Travelodge announced their Fiver Frenzy sale. Also, 2 years ago when we were in the UK and the exchange rate was much better for us we left some money in my building society account. (My husband was convinced that the Bush regime would be bad for exchange rates and, boy, was he right!) We will use that for spending money on this trip as much as we can, rather than having to convert any money at today's rates.
Susan, British living in Massachusetts I am a college student who is spending the semester studying in the UK. It's so frustrating that the dollar's value is low right now. Probably my one chance to ever have an experience like this one and it's going to be so much more expensive than it would have been even a year ago! I am sure my trip will be incredible...I just wish I wasn't going to be paying for it for the rest of my natural life!
Adrienne
Working over the internet in the US and living in London I am experiencing first-hand the full flavour of the non-ending nosedive of the US dollar. While it may be a healthy trend for US exports it's not at all exciting for me.
Anton, London, UK
Since Europe, particularly the UK relies so heavily on US tourist dollars, I think this is worse for the UK than for the US. The world is an interdependent group of countries that are effected by each others economic highs and lows, whether we like to admit it or not.
Tammy, USA
The weak dollar is great for US business. What did the US economy need after September 11th, 2001?... to export. What doesn't it need?...imports. And so how does the economic climate suddenly facilitate?... just that! What a surprise that all of a sudden the dollar starts to fall! Golly gosh! But is it so strange that this should happen? Does not the US government run the world and its economic system for the benefit of US business? Why should we feel so surprised when this happens? Are we really as gullible as all that?
Paul, Buenos Aires, Argentina Lots of US people here saying it's great. Unfortunately, those in the UK whose employers rely on the US as a big market for their products are suffering terrible hits on their income. That in turn hits profits, and hence bonuses, salary rises or even employment levels amongst our workforce.
Anon, UK
Purely selfish, but took my husband to NYC for his 40th birthday just before Xmas and was really, really grateful for the exchange rate. Manhattan is expensive at the best of times, this made it only slightly more manageable! Two Baileys in a hotel bar still cost $25 though!!!!
Fiona, UK
I'm a Brit working in Bermuda and being paid in $US. With my planned wedding due to take place in the UK in April the costs are going up every day. Great news for my British friends back home travelling to Florida, bad news for me.
David Carpenter, Bermuda
Thanks to the tumbling price of the dollar the peso in my country hasn't lowered in value, compared to how it used to do in the past year.
William, Dominican Republic
Let us keep in mind that at any given time the FED and/or the ECB can step in and correct, reverse, or halt the decline in the dollar. For the time-being, they have every intention of letting it sag for the benefit of the US economy, hence the world economy. As the rest of the world picks up, the "dollar policy" will be strengthened. The currency market is only as volatile as it is allowed to be.
Mark Simkiss, Philadelphia, USA You cannot insist on a strong dollar and all the while complain about the gigantic U.S. current account deficit. The specific economic purpose of floating exchange rates, which have in this case created a weaker dollar, is to over time correct these current account deficits, which of course include trade imbalances. In my view, huge U.S. current account deficits as far as the eye can see are a far greater threat to the economic stability of the world than a weaker dollar.
Neil, Chicago, USA
Great news - buying American services and products on the Internet just got even cheaper!
Les, Morpeth, England
As a citizen of the USA, it is very good for the USA. Currently we have an enormous trade deficit. This will help balance that deficit. To those that are crying about the cost of doing business with Europe. I am sorry for the difficulty but overall it is good for the USA.
Patrick , USA
Luckily I converted my money into sterling long before the dollar began its drop. But I do not think that a weak dollar foreshadows economic turmoil. Of course, it's bad for we Americans living abroad, but for American industries, it makes its products much cheaper on the export market. The US MUST do something about its burgeoning trade deficit -- this is an attempt to close that gap.
Adam, American in London
| This is a pre-emptive economic strike against the soon to be established European Union |
If I wasn't already convinced, the comments on this page confirm liberals (democrats) do not understand economics/politics. To claim this will hurt the US is ridiculous. Look around you Europe, Japan artificially inflates the dollar to rein in the yen and China basically pegs it's currency to the US dollar, meaning Chinese goods are no more expensive than before. It won't be US and Chinese consumption that falls, it will be US and Chinese consumption of European goods that falls. Why doesn't someone just come out and say it.... this is a pre-emptive economic strike against the soon to be established European Union (primarily France and Germany). This is America's way of saying, if you want to have dreams of global competition/supremacy, you need to realize this is how the big boys play the game.
Bob, USA My daughter will be studying abroad this spring. After we rented an apartment in Florence in Euros, we have been watching our rent increase as the value of the dollar slides. Since our rent is due monthly, it will get even more expensive if the slide continues.
Ted, Kansas City, USA
American tourists stop going to Europe so much and spend money at home. Foreign tourists START coming to the US more. Foreign Companies buy more from US companies. I'm not an economist, but I fail to see the large-scale downside for the US.
Scott W, USA
Republicans have always preferred to reduce the value of the dollar than reduce the national debt, always taking advantage of the dollar's status as a "global" currency. Americans' savings, in this global economy, are worth less and less, and they earn no interest on it. During the thirty years since Nixon let the dollar float rather than pay for the Vietnam War, American's real earnings have consistently gone down, and the goods we are able to afford grow continually shoddier. I doubt that in the long run the foreign investors who have kept the dollar going will be as gullible as we have been.
Oliver, San Luis Obispo, USA
| It's helping to create new jobs |
The lower value of the dollar has been a boon to the company I work for. We export office supplies around the world, but primarily to Latin America, and business has never been better. Our company has already hired eleven new employees over the past month to help with our sudden increase in volume, and more hirings are sure to follow. The weak dollar, therefore, is a good thing from my perspective. It's helping to create new jobs.
Jason Velez, New York, USA I love everything that represents America. I kept every hope that the dollar will still appreciate in not too long time but, I was totally wrong. All my hard earned dollar is now almost equal to the local currency here in Estonia. I just changed the whole now to the local money making me lose more than 20% of my money.
Opara Victor, Nigerian in Estonia
The fall of the US dollar is the result of an excessive domestic consumption that has supported unhealthy growth compared to that of other economies. For some time now, we all have been depending on the US economic growth and lavish imports, so if these stall, we will be in BIG TROUBLE!! And a falling dollar does not bode well for our exports to the US, while many of our economies are not set yet to import from the US either!!! So the US will only experience lower consumption but not higher exports.
Andres, Santiago de Chile
I am British, living in the Emirates, paid in Dollars. Like most Brits here my major commitments are in Sterling so my income has dropped around 20% in the last 2 years! This is obviously a cause for personal concern however those at home who are crowing about their cheap holidays may like to reflect on the longer term effects on jobs in UK. So yes, we should worry about the currency turmoil!
David Pereira, Ras Al Khaimah UAE
Having a weaker dollar, makes national currencies, more able to buy cheaper American goods, instead of going to a strong euro, difficult to acquire and more expensive to spend.
Jos� Nigrin, Guatemala
I won't travel to London this year. It's usually more expensive than the States, but this year is just too much to afford.
Tom G, Washington, DC
My credits cards have gone overkill on Amazon... Bring back the strong dollar, please! Now!
Martin, Coventry, UK
The falling dollar is just one more symptom of the failed economic and foreign policies of the current administration. As an expat living abroad it is bad enough to be pitied for the destruction of American idealism without being a bit of a joke because our currency is losing value and can't compete with the Euro.
O. G. Burton, Istanbul, Turkey
The USA is exporting unemployment to the rest of the world. At the same time telling other countries to open up there markets. This is a rerun of the 1930's where every one was devaluing.
Eric Rogers, London, UK.
| Did it ever occur to any one that the dollar is being manipulated? |
Did it ever occur to any one that the dollar is being manipulated? Why not? The lower the dollar the more desirable US exports will be. Look at China, the Yen is worth next to nothing and its economy is booming. I say slide dollar slide!!
Michele, USA
The decline of the dollar is killing me. I am an American living in Italy and working for the US government. I live on the economy and therefore rent, electric, gas, water bills are in euros. So you can imagine when I exchanged dollars to euro how much I lose. I don't make that much money either. If the dollar was at least one to one my life would be much better.
Gloria, Vicenza, Italy
Due to a virtually non-existent social net in the USA (in comparison to Germany), my mother is partially dependent on financial help from me. Working part-time and raising a daughter of my own, I don't have much money to spare, but as long as the euro stands higher than the dollar, the little I can send does help.
Daniela, Berlin, Germany
The fall of the dollar is great news for us personal importers. I recently bought some kit from a supplier in Arizona, and despite the shipping, import duty and sales tax I had to pay, it was still 30% cheaper than buying the same stuff here.
Bob H, Glasgow, Scotland
| The current exchange rate is a serious concern to me |
I flew back to Japan to look after my aging mother last December and am now temporarily living in Japan. Therefore, the current exchange rate is a serious concern to me. However, the current exchange rate is creating not only a personal problem but also a bigger problem for the US future. I consider that the current situation is rooted from GW Bush's tactics to get another four years in the office.
Aki, California, USA The American company I work for in the UK has a share buying scheme, where the shares are held in dollars. The recent exchange rate movements on the dollar have increased the value of my shares by 15%! Let's see $2 to the Pound!
DF, Eastleigh, Hampshire
I work in foreign exchange and at the moment my bureau is doing brilliantly. Customers are coming in to buy trips to America and also customers are buying the dollar for their holidays in September/ October. While people are buying holidays and getting more spends then they had hoped the economy will be fine. Because the more money people have the more they will spend which is definitely a bonus.
Carla, Manchester
It is a very worrying trend for us since we export mainly to the USA. We have seen our subsidiary company lose their entire margin over the last year. If things do not improve we shall have to look at moving our manufacturing away from the UK just to make ends meet. I can only see it getting worse with interest rate raises here and the continuing low interest rates in the US. A potential disaster for all UK exporters to the US!!!!
Steve Walters, Stockbridge, Hants, UK
| The dollar is really putting a strain on military life outside of the USA |
My husband and I are American military, stationed in the UK The only reason why we are surviving here, is because I have a British job and earn pounds. The dollar is really putting a strain on military life outside of the USA.
Mrs Jenkins, UK I've travelled to the States for the last 5 years on holiday. Virgin Atlantic kept putting prices up apparently due to the dollar, I haven't seen them putting prices down now though.
Gary, UK
A more likely scenario than a dollar meltdown is a rise in US interest rates. The US Federal Reserve Open Market Committee next meets on January 27 and if the dollar continues to fall until then, it will almost certainly raise rates, possibly by as much as 1 percentage point. That's going to hit stocks and US consumers, who are heavily indebted, reasonably hard, so lots of tasty looking short positions in US banking and retail shares.
Mike, London, UK
I travel to the UK about 40 times a year and have seen my US dollar tank to that of a Third World country. I've taken up eating at petrol stations to save money.
Rick, Chicago, USA
I lived in the US for 5 years and built up quite a bit of credit card debt. I am now in Germany, getting paid in euros and have paid off all my debts in the US. The falling dollar is great for me.
Colin Heyes, UK citizen in Germany
I live in Dubai and am paid in UAE Dirhams, which is directly linked to the US Dollar. However, the majority of my outgoings are in GB Pounds (mortgage etc), so I have effectively taken a rather large pay cut just on exchange rates. Bring back a strong Dollar!
Graham Wilson, Dubai, United Arab Emirates
I was in New York City last week and there seemed to be far more Europeans than usual with loads of shopping bags. I guess they are getting some very good deals.
Shawn, Washington, DC, USA I work and live in Germany for the US government and earn my pay in dollars not euros. Let me tell you first hand... The US dollar is officially a Third World currency. You can't survive this sort of currency inequity. Life is far too expensive here in Europe now!
Anonymous, USA/Germany
I work in the hotel business and have seen American business drop as the Canadian dollar has risen 24% against the US dollar. Although I have seen more European visitors as the euro is currently worth $1.65 Canadian.
Peter, Toronto, Canada
My girlfriend and I are off to Las Vegas in February to get married. Bring on 2 dollars to a pound!!
Charlie Clifford, St Albans, UK
| Everyone will just have to learn to trade among themselves |
Isn't it odd that when the USA's currency is in trouble, it's everyone else's problem? Everyone will just have to learn to trade among themselves to a greater degree, without relying so heavily on the Americans.
David Hazel, Fareham, UK This is great for my company. We import goods from the Far East and we buy in US dollars. Because of the � vs $, we can now offer our products to our customers cheaper - in some cases, up to 5% cheaper. Even when we visit our US office, everything works out cheaper.
Ian, Nottingham, UK
Although I, as an expat, am not directly affected by the depreciating dollar, my father's business clearly is, as they conduct a lot of their business abroad. Fortunately, dad's company is based in Britain, so they benefit from it. The global economy depends on a strong $, so this is already somewhat of a global economic crisis.
Peter Bolton, USA
| If the US dollar remains weak, I think I'll choose another destination |
I was going to go to Wimbledon for a week this year. However, if the US dollar remains weak, I think I'll choose another destination. I'm thinking that perhaps we'll check out Disneyland Paris or perhaps we'll visit Prague again instead.
Sherry, USA Absolutely fabulous - off to Las Vegas in a fortnight. This will give me more money to lose on the slot machines.
Andy D, Hartlepool, UK
I was recently in Montreal, where the Canadian dollar was at a 10-year high against the US dollar. Obviously my bad timing cost me, but I still got more value for my money in Montreal than I would have back home in the north-eastern US.
Jim , NJ, USA
As a poor college student I have twice changed my plans to visit Europe. Hope that it will bounce back up so I get a nice taste of Europe soon and propose to my girlfriend at Schoenbrunn, Vienna.
Saffar, Cincinnati, OH
What is wrong with everyone? A year ago everyone was complaining about the strong dollar, the weak euro and a weak sterling. Now that our so-called manufacturers are enjoying the lower export prices afforded by a weak dollar, we don't hear a pip-squeak from them (or the government) about why they remain uncompetitive in today's money markets. You can't have it both ways. The UK and European economies can insulate themselves from the intra-European environment, but the global economy cannot be bucked. Wake up and smell the 'conomy.
Edwin Thornber, UK/Romania As a Somalilander in Denmark, the weakened dollar has helped my family. We send about 300 dollars a month to Somaliland, and the weakened dollar allows us to change for a smaller amount of Danish Krones.
Said Mahad, Copenhagen, Denmark
I will go to the Grand Canyon this year, and wait on Europe for a rebound of the dollar. Europe is expensive for my budget and my weaker currency makes it too much!
Willy, NYC, USA
I had planned a trip to Ireland, in February and I am now not entirely positive it will be monetarily possible due to the exchange rates. It's unfortunate but it should balance out in the near future.
Mike, NJ, USA
| We aren't far off 0.50!!! |
The weak dollar is costing me a fortune. I'm from the UK, where I went to university, but I've since moved to the US. I have to send money back to the UK every month to pay off my student loans and other debts. The weaker the dollar gets, the more I have to send back every month. This month I was short by 40 pounds after my dollars were converted, as I hadn't realised that the exchange rate had dropped so low. We aren't far off 0.50!!! It's great for my family though, who have recently been out to visit.
Rich, USA The wife and I are planning our annual European vacation to Italy and Cyprus this year. I will buy euros now and hope the dollar falls further in May, when we plan to leave.
Bob Kosko, Pittsburgh PA, USA
My fianc�e is from China and studies here in England at university. Because China has pegged its currency to the dollar, what once was a comfortable amount of money to live off and pay the �18,000 fees for foreign students now barely pays that.
Phill C, Sheffield, UK
As an American this means a couple of things to me. The first is that I won't be travelling to the UK anytime soon. The second, is that I won't buy the lovely British cakes and teas that I like so much. The US dollar is not going to collapse but the weakness will hurt everyone, not just Americans.
Gina, USA
I think it's great! I regularly travel on holiday to a country that has it's currency linked to the US dollar. My British pound is now worth a lot more. I can stay at posher hotels, eat at more expensive restaurants and buy more presents!
Taz, UK
If the US dollar collapses, it would be mainly the USA in crisis. Already the stock market is taking its precautions by no longer trusting the dollar and investing in more reliable resources like gold.
Karel, Bristol
The lowest interest rates in the United States in 50 years is a strong stimulus to the US economy prior to the upcoming presidential election and beyond. One consequence is a very strong euro which is discouraging American tourism in Europe and damaging exports to the US while favouring imports to the US from Asia. France and Germany are in a similar position to where the US was in 1928 just prior to the stock market crash and depression.
Mark, USA
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