THE strength of a country’s currency impacts its economy in many ways, both locally and internationally.
More often than not, currency exchange affects the cost of living as well as the cost of doing business. Whether you’re a business person or just a simple consumer of goods and services, currency conversion rates will always affect you either directly or indirectly.
And to get to the main issue vans are one of the most important types of vehicles you can come across. They are always a convenient transport alternative when you need to relocate, tour the country as a group or move bulky items from point A to point B.
What you spend on hiring or even buying a van will vary depending on factors such as size, make, and type, among others. But really, are van prices influenced by exchange rates?
If you guessed right, the correct answer is yes. But here are some pointers on how Forex rates affect van prices.
1. Currency conversion rates affect oil/gas prices
Oil and gas are among the most common commodities whose price is affected by currency exchange fluctuations (the opposite is also true). This is mostly because each and every nation relies on these commodities to power their industries, commercial equipment, motor vehicles, and much more. Especially if you’re not in a major oil-producing country, chances are higher that you’ll pay more to hire a van if your local currency weakens.
2. Forex rates affect importation costs
It goes without saying, that China, Japan, USA, South Korea, Germany, and India are some of the world’s largest producers of motor vehicles.
So if the currency of the source country happens to become stronger the costs of importation (including purchase, shipping, and taxation) will be higher. Unfortunately, these companies are in business and they have to make their profit at the end of the day, meaning that these costs will be transferred over to their local consumer. You will end up paying more to rent or buy the van locally when the conversion rates aren’t on your local currency’s favor.
3. Forex impacts inflation
Last but not least, there’s a tight link between inflation and exchange rates, in such a way that one has an impact on the other. The weakening of a local currency can result in a lower purchasing power/value of money, accompanied by a general increase in prices, which is the exact definition of inflation.
And needless to mention, you can only examine a currency’s strength by looking at the Forex rates or how it compares to other currencies around the world. And as earlier mentioned, oil and gas are among the most demanded commodities, which suggests one obvious thing… that currency exchange affects van prices.
And there you have it! From the above three pointers, we can safely conclude that what you pay to buy or rent a van may be dependent on the current purchasing power or value of your local currency compared to others on the global market. All the same, you can always play with the figures to your advantage if you understand how currency exchange works.