Taj Mahal and Gisele Bundchen will not accept dollars for payment. Hard to believe that we are the point that cultural icons are refusing to accept dollars. I was referring to the Taj Mahal. However, some of these news reports are extreme dollar bashing.
The Indian rupee has appreciated nicely over the last few years but its growth is more a function of the Indian economy which has seen significant growth. It would be natural to see the currency appreciation. The Indian government actually wants to slow the appreciation of the currency and has added some capital controls for equity investments. May be they should accept more dollars.
Ms Bundchen, a Brazilian supermodel, has declared that she would like to have her contracts in euros not dollars because of currency uncertainty. Payment of contracts is usually made in a home currency or where purchasing power will be needed. If she is spending more time in Europe over the United States, changing contract terms is appropriate regardless of the dollar direction. (Tom Brady should take note.)
Who is willing to stand up and say they want to hold dollars? We have not heard from the Bush administration, but as we close the year there are some buyers that are coming out for the lonely dollar. The dollar has rallied approximately 3 percent against the Euro. The Japanese yen, Canadian dollar and British pound have all fallen in the last month. While this may be more technical driven, the dollar has started to stabilize for year-end. The key issue is what will investors think when they return from their holidays. January has been a volatile period for currency trading as portfolios are adjusted.
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