Dramatic evidence of the dollar vs. the euro

Photo by Flickr user AstroGuy

Photo by Flickr user AstroGuy

I just came across this article from Reuters about trying to exchange American dollars in Amsterdam.  Keep this in mind if you are traveling to Europe at all this summer … there is a huge amount of uncertainty regarding the American currency and the days of easy dollar to euro in-person exchanges may be gone.

What I will normally do myself is hit the cash machine as soon as I land in Europe (withdrawing cash with a checkcard will often give you the best rate).  Don’t rely anymore on carrying dollars and exchanging as you go.

How does this relate to the wine business?  When we contract with European wineries to purchase products more often than ever the wineries are insisting in payment in Euros, not dollars.  In other words, the ‘grey zone’ or ‘wiggle room’ of price fluctuations is gone and, like commodities or stocks, the price of a given wine can change overnight vis-a-vis the ever fluctuating exchange rate.  So if you see your favorite $6.99 wine step to $7.29, then to $7.89, then to $8.29, that’s why.  In years past it would have been a ‘correction’ directly from $7 to $9.  Nowadays it’s smaller steps to the same result.

A great website to keep an eye on the exchange rate can be found here. I highly reccomend you bookmark this site and revisit often.

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