Following a downgrade in credit ratings of nine euro zone countries, Reuters reports the euro is likely to post further losses in the coming week after it dropped on Friday the 13th to its lowest against the U.S. dollar in nearly 17 months.
"Many of the yachts we represent for mega yacht charters are owned by European investors. They set their rates in Euros – a currency that is being battered by the downgraded credit ratings of euro zone countries like France, Spain, and Italy," says Sheeder.
American travelers looking to secure rental vacations on European-owned superyachts are seeing their US dollar stretch further than in the past two charter seasons. "US-based travelers were on the short end of the stick for quite some time," says Sheeder. "As their dollars continue to strengthen they can upgrade to larger yachts without paying more money. The foreign currency pendulum is definitely swinging in their direction."
The growing inventory of luxury vessels for hire, coupled with low demand due to the global recession is further putting pressure on charter rates. "The shrinking euro plus excess inventory and low demand is creating tremendous value for United States residents looking to charter in the Caribbean this winter and even in the Mediterranean this summer," explains Sheeder.
Sheeder and her advisors believe the tumble is not over. "The breakdown in talks between Greece and its creditor banks means Greece is on the verge of collapse. This could continue the downtrend in the euro," states Sheeder.
Some currency strategists see the euro possibly hitting $1.25 by the end of next week, with a target of between $1.21-$1.22. The euro plunged to a low of $1.26240, its weakest level since late August 2010, on the EBS trading platform. On Friday the 13th, it last traded at $1.26830, down 1.1 percent on the day. The euro, down slightly on the week, posted its third straight weekly loss, based on EBS data.
"On the bright side," says Sheeder, the tumbling euro will provide a significant incentive for Americans to book European-owned yachts at a deeply-discounted price for many months to come."
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