Question

Your US company sends you on an assignment in Spain for 3 months. They advance you...

Your US company sends you on an assignment in Spain for 3 months. They advance you $200 per day (per diem), or $18000.   You pay for your hotel, meals, etc. with your US issued credit card. During your 3 months in Spain, the Euro weakens by 10%. What are the implications to you? What, if anything do you do?

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Answer #1

If the Euro weakens by 10% that means I have to spend 10% less on everything I purchase with the American credit card.

A weaker Euro means the export to the US is getting cheaper, the main reason for this is the stronger dollar in comparison to the new Euro exchange rate. A Person traveling to the Euro Zone will have to pay less Dollar to avail any service or buy any good because tourism no matter its for business or pleasure is considered invisible exports. As the things are cheaper now I can increase my consumption in the given amount, I have more resources (10% more resources now as compared to before.)

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