The US dollar has lost around 15 percent of its value against the euro since January, falling from €0.97 to €0.85, according to data released this week. The drop is linked to waning confidence in the US economy and is affecting Finnish consumers and businesses in different ways.
The decline means cheaper imported goods for consumers and more affordable travel to dollar-pegged destinations. But for exporters, the shift introduces new uncertainty.
Antti Ilvonen, senior analyst at Danske Bank, said dollar-priced online purchases are already becoming cheaper. “Consumers will notice this most clearly when buying from sites like Amazon or eBay,” he said. He added that prices of goods produced in Europe but using dollar-priced components may also drop slightly.
Fuel prices are also falling. Ilvonen noted that crude oil prices have dropped by about 20 percent since the start of the year, with roughly half of that decline driven by the dollar’s weakening. “Despite ongoing instability in the Middle East, prices at the pump could fall further,” he said.
For travellers, the weaker dollar makes the US significantly more affordable. Although US inflation remains high, it does not fully offset the gains from the exchange rate shift. Ilvonen pointed out that there are many smaller countries around the world where the local currency is pegged to the dollar, offering further travel savings.
On the other hand, Finnish industry is under pressure. Sami Pakarinen, chief economist at the Confederation of Finnish Industries, said the falling dollar is eroding export competitiveness. “As the euro strengthens, Finnish and European goods become more expensive in the US. That’s a major source of uncertainty for exporters,” he said.
Pakarinen added that Finnish firms with production facilities in the US are less affected.
He said the situation also offers an opportunity for Europe. “Companies must look for new markets, and Europe has potential. For Finnish firms, this means turning focus inward to the EU.”
Germany’s move to unlock major investment could help revitalise the EU internal market, which Pakarinen described as crucial. “Europe can deliver more growth internally if the right steps are taken,” he said.
A further complication comes from US trade policy. President Donald Trump is expected to clarify his position on EU tariffs later this week. While postponement or reassessment are possible, the uncertainty remains a major concern for Finnish exporters.
“The tariff policy and the unpredictability it brings are significant problems,” Pakarinen said. “It’s a major source of uncertainty right now and is already having a negative impact.”
The weakening dollar may contribute to US inflation, and proposed tariffs could worsen it.
HT
