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rfmcdonaldThis Reuters story has gotten quite a lot of coverage, in the light of the ongoing decline in the value of the American dollar.
An amusing news item? Perhaps, but people shouldn't really much more into it. Back in 1985 when Tina Turner was singing that she'd accept payment in either "Deutschmarks or dollars" for her private dances, there were only a bit more than 63 million people in West Germany versus a bit under 240 million in the United States. There might well have been quite a few West German visitors to wherever Turner was dancing, but it would have been unlikely that there would have been such a concentration that her wider community would accept Deutsche marks.
That was then. Now, the Eurozone has a population of 320 million people. Looking at Wikipedia's article on tourism in New York City, I found out that at least 1.57 million Eurozone tourists visited from Eurozone countries in 2005, compared to the 1.17 million Britons and a bit over eight hundred thousand Canadians who joined them. Visitors from the Eurozone easily form a plurality of New York City's international visitors. Why shouldn't New York City merchants accept the currency used by so many potential patrons? Judging by Canadian precedents, it's not like they'll have to take a financial hit from this decision.
In the latest example that the U.S. dollar just ain't what it used to be, some shops in New York City have begun accepting euros and other foreign currency as payment for merchandise.
"We had decided that money is money and we'll take it and just do the exchange whenever we can with our bank," Robert Chu, owner of East Village Wines, told Reuters television.
The increasingly weak U.S. dollar, once considered the king among currencies, has brought waves of European tourists to New York with money to burn and looking to take advantage of hugely favorable exchange rates.
"We didn't realize we would take so much in and there were that many people traveling or having euros to bring in. But some days, you'd be surprised at how many euros you get," Chu said.
"Now we have to get familiar with other currencies and the (British) pound and the Canadian dollars we take," he said.
An amusing news item? Perhaps, but people shouldn't really much more into it. Back in 1985 when Tina Turner was singing that she'd accept payment in either "Deutschmarks or dollars" for her private dances, there were only a bit more than 63 million people in West Germany versus a bit under 240 million in the United States. There might well have been quite a few West German visitors to wherever Turner was dancing, but it would have been unlikely that there would have been such a concentration that her wider community would accept Deutsche marks.
That was then. Now, the Eurozone has a population of 320 million people. Looking at Wikipedia's article on tourism in New York City, I found out that at least 1.57 million Eurozone tourists visited from Eurozone countries in 2005, compared to the 1.17 million Britons and a bit over eight hundred thousand Canadians who joined them. Visitors from the Eurozone easily form a plurality of New York City's international visitors. Why shouldn't New York City merchants accept the currency used by so many potential patrons? Judging by Canadian precedents, it's not like they'll have to take a financial hit from this decision.
Often by the cash register there'll be a sign reading U.S. CURRENCY __X%, offering a standard exchange rate. This percentage, say 25%, is the "premium" -- it means that for every U.S. greenback you hand over, the cashier will see it as $1.25 in Canadian dollars. Thus, for an $8 tab you need pay only $6 in U.S. bills. However, currency conversions at the till rarely provide the best rates of exchange, so it's best to shop around for the best rate, which is usually found in banks.
