This from Reuters today.
As the dollar fell in 2004, investors piled into foreign companies' U.S.-listed securities to make a currency-conversion killing.
For example, a stock in a foreign market trading at 10 euros in September had an ADR price of $12 because one euro then equaled $1.20. Today, even if the foreign stock's value is unchanged, the ADR is priced at about $13.70 because the dollar has weakened to almost $1.37 against the euro.
The price of an ADR is mainly driven by the price of its locally-listed share. But the ADR trades in dollars -- and that benefits U.S. investors when the dollar weakens.
"Today, investors are seeing significantly better returns by owning the ADR," said Max Eyers, head of international trading at J.P. Morgan's ADR desk.
The dollar has lost 10 percent against the euro and 7 percent against the yen in the last three months alone.
As the dollar falls, look for an increase in inflation, or an increase in the interest rates as the Federal Reserve works to prevent inflation. Either will damage the economy.
This is a direct result of the uncontrolled federal deficit. You may thank your President and Congress.
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