Currency fluctuations this week have meant the difference between profit and loss for distributors and will affect prices of memory for dealers.
The pound swung a total of three pence against the dollar on Tuesday, rising to $1.69 and dropping three points the following morning, with many financial analysts predicting a merry-go-round all the way until the end of the year. Some even predict that the #1 will rise to the $2 dollar mark before 1997 dawns.
That has led to changes in pricing for dealers, major memory distributors have admitted. Mark Leatham, sales and marketing director at Kingston Technology, said the result was harder for distributors than dealers.
?Currency has fluctuated a lot this week. We trade in dollars so fluctuations can make distributors very competitive or not. The real impact is at the dealer level,? Leatham said. Some distributors, he said, bought on the spot market rather than forward buying, forcing reputable companies to lower their prices to match those offered to dealers.
That was reinforced by distributor Dane-Elec, which has suffered recently from VAT fraud in the European Union. Alan Stanley, managing director at the company, said: ?If you forward buy dollars you can get caught. We have to forward buy currency and that means prices will fluctuate. Currency fluctuations are directly related to prices.?
If the pound does rise to $2 by the end of the year, that will be good for reputable distributors, he said, because most forward buy currency.
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