Exchange rate trends--January 2000-November 2010.

• Author: Cox, William
• Position: Alaska Trends

The ever increasing importance of currency exchange rates is a critical part of maintaining economic prosperity and competitiveness against international competitors. Companies with overseas operations earn their profits in foreign currencies and must then repatriate these profits into U.S. Dollars. This repatriation can have a large effect on the company's profitability, magnifying or reducing the company's overall earnings in tandem with the fluctuation of the exchange rates.

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The chart shows the indexed exchange rates of five major currencies relative to the U.S. Dollar using a base month of January 2000 = 100. Index Values represent the amount of foreign currency received in exchange for $1 of U.S. currency, indexed to the base month. An increased index value would indicate the company would receive more of the foreign currency per dollar of U.S. currency exchanged, suggesting the U.S. Dollar had appreciated in relation to the foreign currency. In contrast, a decreased index value would indicate the opposite, depreciation of the U.S. Dollar in relation to the foreign currency.

As displayed in the chart, all of the foreign currencies except the British Pound have appreciated against the U.S. Dollar since January 2000, thereby making the U.S. Dollar less valuable than these currencies. This helps U.S. exporters in these countries as their products are relatively less expensive than domestic products to foreign consumers, but hurts U.S. importers of products from these countries as the foreign products become more expensive to U.S. consumers.

Source: www.oanda.com/currency/average

Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

ALASKA TRENDS Indicator Units Period GENERAL Personal Income--Alaska US$ 2nd Q10 Personal Income--United States US$ 2nd Q10 Consumer Prices--Anchorage 1982-1984=100 1st H10 Consumer Prices--United States 1982-1984=100 1st H10 Bankruptcies Alaska Total Number Filed September Anchorage Total Number Filed September Fairbanks Total Number Filed September EMPLOYMENT Alaska Thousands September Anchorage & Mat-Su Thousands September Fairbanks Thousands September Southeast Thousands September Gulf Coast Thousands September Sectoral Distribution--Alaska Total Nonfarm Thousands September Goods Producing Thousands September Services Providing Thousands September Mining and Logging Thousands September Mining Thousands September Oil & Gas Thousands...