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Technology Stocks : Atmel - the trend is about to change
ATML 8.1400.0%Apr 12 5:00 PM EST
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To: Mario who wrote (9855)6/3/1999 1:37:00 PM
From: Tom Nguyen  Read Replies (1) of 13565
 
Mario, let me try to explain your question about currency in simple terms.

Strong dollar can do two things negatively to US companies:

1) It makes US goods more expensive. Foreigners need more of their currencies to pay for the same US goods. It is not competive for the US companies this way.

2) US companies get less dollars when converting from foreign currencies. This is true when US companies sell abroad and collect in foreign currencies.

Example: You have 100 Euros and you want to convert to dollars

If exchange rate is $1.03/Euro
You will get 100 Euro X $1.03/Euro = $103

If the dollar gets stronger, you get less dollar per Euro.
If rate is $0.90/Euro
You will get 100 Euro X $0.90/Euro = $90

Since US companies report their earnings in dollars, it does hurt them when the dollar gets too strong.

Tom
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