How the world currency market affects the freight industry
The freight industry deals with international trade relations and as a result is almost directly responsible for any fluctuations in the world currency market. When there is a fluctuation in the world currency market and a particular currency drops in value, this means that particular country will suffer a loss when it comes to importing goods as they will have to pay more to get the same amount of goods.
For instance, when the dollar rate does down, the US will have to pay more money to buy goods from other countries. Similarly, should the dollar go up in value, traders in the US will end up profiting as they will pay less for their goods. This in turn will affect the economy of the country selling its goods and thereby its currency value creating a lot of waves between the freight industry and the world currency market.
Presently, the British Pound and the Euro hold positions of high value on the world currency market and as a result exporting goods to the UK and Europe is sure to be a profitable enterprise. The US however has seen a decline in the value of the dollar after the recession and traders who transport goods to and from the US are no longer doing as well as they once were. Many Asian countries like India and China do not have high value currency and as a result buying goods from these regions is a good way of making a profit.
Simultaneously, currency values are affected by trade as well. The recent volcanic eruption which shutdown airspace in Europe resulted in a decline in air freight volume, which in turn cut back on the financial income made by shipping agencies and food related industries. The horticulture industry in Kenya lost $3 million per day as a result of this, which has undoubtedly affected the world currency market.
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