With the circulation of Euro in great many countries in Europe, the exchange rate of Euro vs US$ will climb steadily. This may make Leica products more expensive.

At the same time, Japan, trying to dig herself out of a long recession, is agressivly depreciates the Yen. This will make Japan cameras cheaper, all these may adversely affect the sales of Leica products. Leica may have a tough 2002.

-- martin tai (martin.tai@sympatico.ca), January 16, 2002

Answers

Martin,

For the moment the exchange rate of Euro vs US$ is going down.

And several Leica product are "Made in Japan" or will be.

-- Lucien (lucien_vd@yahoo.com), January 16, 2002.

at the moment the euro against the dollar IS down, and not going down. it kept its low value for quite a while now. let's hope, the downfall doesn't start again. but with those not so great prospects for US, the situation might change.

-- stefan randlkofer (geesbert@yahoo.com), January 16, 2002.

I'm looking at this Euro$ very close at the present time since I will going to Italy 5/2002. When you say that the Euro is down, are you saying that the price paid by those of us with the USD will be paying more for goods and services, or less once exchanged?

-- Don M (Maldos@home.com), January 16, 2002.

If, as seems likely, the eUro continues to weaken against the US$ then the price of Leica products should fall since they need fewer dollars to provide the euro equivalent. The fact that some struggling economies are joining the eUro will further exacerbate the position. This all augurs well for stable US prices for Leica products but the Europeans are likely to see some steep Leica price increases. The clever ones are the UK who have stayed out of the eUro and are and will continue to benefit.

-- Tony Brookes (gdz00@lineone.net), January 16, 2002.

Thank You Tony! Long may we keep the £.

-- Giles Poilu (giles@monpoilu.icom43.net), January 16, 2002.

I think with the state of the financial markets in Japan this will bode very well for Leica M users.

The market is driven by DEMAND, not how cheap or expensive things are.

Remember the Japanese are AVID collectors of classic cameras and if they do well its reflected in classic camera prices. Remember when Japan was doing well in the 80s?

When Japan got into hot water some 13 years ago the market price for collectable cameras also went down. For the user this is GREAT! For the collector with time to wait this is GREATER!

Contrarian is best... contrarian is best.

My 0.02.

-- John Chan (ouroboros_2001@yahoo.com), January 16, 2002.

I don't know, John . . . I think the Japanese will soon be superseded as the preeminent nation of camera collectors & photo buffs by the Chinese (both overseas & in the PRC) as seen by the preponderance of Chinese names seen on this list!

-- Chris Chen (Washington, DC) (furcafe@cris.com), January 16, 2002.

As long as the Chinese don't vacuum wrap they're cameras and stuff them into argon-filled safes then there's hope for the rest of us!

;-)

-- John Chan (ouroboros_2001@yahoo.com), January 16, 2002.

Actually, the low Euro HURTS Leica (as the management has pointed out in their reports explaining losses each quarter for the past year). A lot of the materials/supplies they buy come from Yen/Dollar economies, and they have to buy those expensive currencies with their depreciated Euros.

(e.g. paying Kyocera and Sygma for some of the R zooms in yen; buying other parts, paying for the japan-made p&s cameras, etc.)

As manufactured content becomes globalized, a lot of old assumptions about how currency value affects a company's costs will go out the window.

-- Andy Piper (apidens@denver.infi.net), January 16, 2002.

Andy - With respect quite the reverse is true. The more industry globalizes the more it will need to pay most careful attention to exchange rates. Strong currencies will continue to prosper as Leica buyers. Leitz will howerver try to buy in from low value currencies.

-- Tony Brookes (gdz00@lineone.net), January 17, 2002.

> the low Euro HURTS Leica > (as the management has pointed out in their reports explaining losses each quarter for the past year)

Only because they didn't protect themself against that risk.

Lucien

-- Lucien (lucien_vd@yahoo.fr), January 17, 2002.

Euro is a great help for travellers to Europe, which is still the number 1 travel destination. More and more travellers to Europe will carry Euro instead of US$, this will increase the demand for Euro and deminish the demand for US$.

Further, more and more central banks will divert a portion of their reserves away from US$ into Euro. These two factors will in the long term, increase the demand for Euro and its value

-- martin tai (martin.tai@capcanada.com), January 17, 2002.

[down with Tony Blair] and Long live the ££Pound££, Hooray!

-- sparkie (sparkie@mailcity.com), January 17, 2002.

How much do you want to bet that the recently devalued Argentinian pesos are being converted to Euros at a faster rate than US Greenbacks?

I'll put my T7 down on that one!

-- John Chan (ouroboros_2001@yahoo.com), January 17, 2002.

Tony: I don't think we're disagreeing - to me both these statements are true. My main point was - don't assume a weak Euro means that Leica gets a big boost in net revenue - their prices may drop in dollars and yen, but their expenses go up.

"As manufactured content becomes globalized, a lot of old assumptions about how currency value affects a company's costs will go out the window."

"The more industry globalizes the more it will need to pay most careful attention to exchange rates."

(Although actually now that I look at FY 2001/2002 reports, they aren't complaining about exchange rates anymore. But Leica P&S sales dropped 68 PERCENT(!) over FY 2000!)

Fascinating reading, those quarterly reports. Did you know that Leica sales divide into 4 roughly equal parts: Germany, the rest of Europe, Asia/Australia, and the NAFTA countries. In other words: Canada, the US and Mexico combined buy about as much Leica gear each year as Germany does all by its lonesome.

-- Andy Piper (apidens@denver.infi.net), January 17, 2002.

"With the circulation of Euro in great many countries in Europe, the exchange rate of Euro vs US$ will climb steadily."

You cannot say which direction currencies will move, you can only guess. When we had the d-mark it was the same way -- sometimes up, sometimes down.

-- Russell Broks (russell@ebrooks.org), January 18, 2002.

Andy - Of course you're right that Leitz revnues will fall hence the need to put up their Euro prices - but if the euro continues to decline then they can never be ahead of the game. The sinister thing is that if you look at their balance sheet for the last year of the Dmark they have lost 20% of the value of the company - far greater than any profits - without lifting a finger. The euro has no future for at least 20 years in my view until all the weak central European countries can show some economic strength.

-- Tony Brookes (gdz00@lineone.net), January 18, 2002.

A recent report by Morgan Stanley Dean Witter said that the dominant economic position of USA in the past decade will soon come to and end, with Europe and Asia rising along with USA as trio

This report advised clients to move asset to Europe.

In the next 3 years, us$ may depreciate 15%-20% vs Euro, the report said.

-- martin tai (martin.tai@capcanada.com), March 07, 2002.

Morgan Stanley are basing their assumptions on a declining dollar not a rising Euro. I would doubt their argument. The dollar is a reserve currency for so many nations and with europe about to join up with another 6 failing central european countries where does the strength come from ?

-- Tony Brookes (gdz00@lineone.net), March 09, 2002.

At May 30, 2002, the exchange rate for EURO is 1 EUR : 0.94 US$ a 15 month high.

-- martin tai (martin.tai@capcanada.com), May 31, 2002.

If any of you could really predict what will happen to the Euro relative to the US Dollar, you could make a fortune in currency exchange. But don't believe it. Exchange rates depend on too many factors, some of which cannot be predicted. I am only able to make one prediction at this point: The relative strength of the Euro will either go up, or it will go down, or else it will remain unchanged. And you can quote me on that. :-)

-- Eliot (erosen@lij.edu), May 31, 2002.

Eliot, currency future trading is a big business, there are some very good traders making big bucks, certainly there are more who lost big too.

At least I was right saying in January that Euro will climb, and the other who said contrary was wrong.

-- martin tai (martin.tai@capcanada.com), June 01, 2002.