A lot of companies face a dilemma.
As the U.S. dollar continues to weaken against almost every currency worldwide, particularly the euro, manufacturers will have to make important decisions fairly soon.
A lot of companies are routinely involved with international trade by future commitments in the currencies that they need to make their purchases. So BMW of North America, for example, might be buying euro futures to ensure that it has a stable supply of euro currency to buy BMWs from the German manufacturer.
As the dollar falls in value, the company will be able to use those futures for a period to keep its prices stable.
But sooner or later, all importers in the United States will face higher prices from the home country. And at that time, the car companies that are importing from countries with a strong currency will have to raise prices if they want to retain their profit margins.
If they can't afford to raise prices in a competitive U.S. market, their profits will erode as they pay more dollars for the same vehicles.
It will be interesting to watch the pricing of imported cars in the United States during the next few months as the importers decide whether to raise prices or suffer a reduction in profits.
Meanwhile, the manufacturers based in the United States that are involved in exporting will make the opposite decision. Since their overseas customers will be able to buy U.S. products for less money, the U.S. makers will have the happy choice of cutting prices or reaping higher profits. There isn't much question that they'll maintain pricing and happily accept the windfall in profitability.
The currency upheaval has happened before in the U.S. market, usually with the yen. On those occasions, the Japanese companies did everything in their power to keep from raising prices, even if it meant lower profits for a while.
If the currency maintained its strength, the companies would eventually have to raise prices.
It must be frustrating when something that is completely out of control plays a big role in your success.