Dollar Strengthens Versus Euro

Chart of the Week for June 10-16, 2005

The US dollar has steadily strengthened against the Euro since peaking at $1.36/Euro near year end 2004. Recently, France and The Netherlands rejected adoption of the European Union’s Constitution resulting in uncertainty and a weakening Euro against all major currencies, including the dollar. Through June 9, the dollar had strengthened to $1.22/Euro. What this means is that the same European goods costing $1.36 in late December, 2004, cost $1.22 on June 9. Or, inversely, foreign investors who could purchase U.S. goods for €0.74 in December, needed to pay €0.82 for the same goods on June 9.

What does this mean for investors? The US dollar bounce-back (rise) helps US-based mutual funds but is not beneficial to foreign funds that are not tied to the US dollar. Currency movements provide a perspective but do not portend future investment results. With uncertain markets and currency movements, it is worthwhile to maintain a diversified approach to retirement investing.

This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.

Investment information can change rapidly and the changes can be significant particularly in volatile markets. For this reason “as of”’ dates are provided for specific data where applicable. The information should not be considered current after the dates provided.

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The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.