Euro slides 12% against dollar
Alan Peat
DESPITE THE euro plunging some 12% against the US dollar in the last year, this is not a sufficient shift for the shipping lines in the Europe Southern Africa Conference to re-introduce the currency adjustment factor (CAF), according to Steve Pollington, speaking to FTW from the conference offices in London.
A relic of the days when the European Union countries had 11 currencies - all busy fluctuating against each other and the US$ - the CAF acted as a supposed safety margin for the lines in an often turbulent currency market.
But, Pollington told FTW at this time last year, the stability of the euro had made the CAF an unnecessary complication - and it was then zeroed-out.
But the stability of the euro has, rather sadly, tended to be a stable downward swing against the dollar.
However, said Pollington, the ESAC lines have been keeping the CAF percentage under daily review and at the present time, there are no plans to reintroduce it.
He also promised a suitable notice period to the trade should this ever become the case.
But, Pollington said, I doubt that the lines would have any need to re-introduce CAF - as most costs are dollar-denominated.
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