Swings Mucking Up Domain Market — Exchange Rate

Rapid changes in exchange rates affecting domain name transactions.

The value of the U.S. dollar has soared in recent months compared to the Canadian Dollar, British Pound, Euro, and a number of other currencies. There are winners and losers.

How much has the value of the dollar changed?
Two months ago a Euro would buy regarding $1.60 USD. Now it buys $1.25 USD. That’s down 22%.

Two months ago a British pound would buy almost $2.00 USD. Now it buys $1.56. That’s also down 22%.

Two months ago a Canadian dollar would buy regarding $1.00 USD. Now it buys $.78 USD. Again, down 22%.

Two months ago an Australian dollar would buy $.96 USD. Now it buys only $.61 USD. That’s down a whopping 36%.

Emerging market currencies are down even more compared to the dollar. The Japanese Yen has held its own against the dollar.

Who wins?
Buyers in the United States win if they buy domain names from people in most countries using other currencies (save for the yen). A domain that sold for 10,000 Euros 3 months ago would have cost $16,000 USD. Now it will cost $12,500 USD.

Sellers in other countries can win when selling to U.S. citizens who’s currency now goes a lot further.

Dark Blue Sea wins big. The Australian firm pays its employees in Australian dollars but earns money in mostly U.S. dollars (most of it from Google). The firm had currency hedges in place, but still the firm has languished as the dollar melted over the past few years. Hopefully some of that trend will be reversed.

Who loses?
Buyers outside the U.S. who were taking advantage of a weak dollar to buy domains from U.S. domain investors.

United States sellers who were more than happy to sell domains to friends in Europe.