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Euros and/or US dollars
Thread poster: xxxPFB
xxxPFB  Identity Verified
Local time: 08:52
English to French
+ ...
Jan 4, 2006

Hello everyone

The current exchange rate seems to be €1.00 = US $ 1.20, and I was wondering whether colleagues in the euro zone - and possibly elsewhere - reflected this in their quotes.

I've just declined an offer to work for a client who accepted my quote in euros, but mentioned the same amount in US $ in their PO, thus effectively taking 20% off my income.

I'd be interested to know what other colleagues do in this case.

Thanks in advance.


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xxxMarc P  Identity Verified
Local time: 08:52
German to English
+ ...
Euros and/or US dollars Jan 4, 2006

Philippe Boucry wrote:

I've just declined an offer to work for a client who accepted my quote in euros, but mentioned the same amount in US $ in their PO, thus effectively taking 20% off my income.


There is nothing wrong with negotiation over prices, but some practices look very much like an attempt to trick the translator.

For instance, I was recently approached by a UK translation company. I quoted my usual rates in euro/line (target), but understandably the customer asked me to convert them to the GBP/kwd (source) more common in the UK.

When I had done so, quoting GBP XX/kwd, the customer then came back to me saying that since I was in Germany, would I mind quoting in euros - and then proposed euro XX/kwd, i.e. simply substituted "euros" for "GBP" in my proposed rate! Perhaps some people fall for this kind of thing?

My neighbour told me recently that before introduction of the euro, he had topped up the oil of his old VW bus very frequently with a cheap brand that cost 10 DM/litre. When he asked for it at the store after introduction of the euro, he was told that it was now even cheaper - only 7.95...

Marc

[Edited at 2006-01-04 12:12]


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Edward Potter  Identity Verified
Spain
Local time: 08:52
Member (2003)
Spanish to English
+ ...
Euros and Dollars Jan 4, 2006

Hello Phillip.

I have always wondered how the Euro can be so strong against the dollar. The U.S. is much more stable across the board. Maybe there are things I don't understand, such as why people act irrationally.

It does seem that U.S. companies generally pay less due to the exchange rate. Seems like we have two markets here.


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RobinB  Identity Verified
Germany
Local time: 08:52
German to English
Pricing in the downside Jan 4, 2006

Edward Potter wrote:I have always wondered how the Euro can be so strong against the dollar.


I don't think that euro is priced particularly strongly against the dollar - after all, it's now about the same exchange rate as when the euro was introduced. It has been considerably higher at certain points in the past couple of years, and the current lower rate reflects the Fed's successive interest rate hikes as well as lingering uncertainty about economic growth in the euro zone.

However, I think we're likely to see a stronger euro over the next 12 months or so as doubts grow about the ability of the US economy to sustain the current pace of growth (see e.g. FT opinions today and in the past week or so), coupled with a more upbeat assessment of economic prospects in the euro zone.

I suppose there's a psychological tendency to expect euro/dollar parity, but I don't think there's any real economic justification for that, certainly not at the present.

Ultimately, the US is still for Europe what it has been for most of the past 20 years or so - a low-wage economy

Robin


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RobinB  Identity Verified
Germany
Local time: 08:52
German to English
and a PS Jan 4, 2006

Edward Potter wrote:Seems like we have two markets here.


So what's new? There's no such thing as a "global translation market", certainly not on the sales side, and still only partly on the purchasing side. The US is itself a distinct translation market, and it's not at all possible to speak of the euro zone as in any way a homogeneous market - each EU member state (eurozone member or not) is a separate market governed by often radically differing market rules.

I think that for the foreseeable future at least, the US will be an attractive market for EU translation buyers, and the EU will continue to be an attractive market for US translation providers.

Robin


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RobinB  Identity Verified
Germany
Local time: 08:52
German to English
Selling into the US Jan 4, 2006

Philippe Boucry wrote:The current exchange rate seems to be €1.00 = US $ 1.20, and I was wondering whether colleagues in the euro zone - and possibly elsewhere - reflected this in their quotes.


Philippe,

I think the euro/dollar rate trend is going to reverse soon, probably in 2006. At the moment, the dollar is not far off its 6-year high against the euro. Consensus estimates see the euro nudging USD 1.30 by the end of this year. This will make EU translation providers even more expensive, or looked at from another perspective, it will make the US an even less attractive market for EU translators.

I think that if you want to continue selling to the US (or denominating your prices in USD), you're going to have to accept an erosion of up to 10% in your translation income expressed in euros.

Sorry...

Robin


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writeaway  Identity Verified

Local time: 08:52
Partial member (2003)
French to English
+ ...
How about agencies in Europe quoting their rates to translators in US$$ Jan 4, 2006

... and undoubtedly charging their European customers prices in Euro.
We've seen agencies in the Netherlands, Spain, France etc. actually posting jobs on Proz with rates in US$$. That's something I find particularly disgusting.


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Ralf Lemster  Identity Verified
Germany
Local time: 08:52
English to German
+ ...
Exchange rates are transparent Jan 4, 2006

Hi writeaway,
writeaway wrote:

... and undoubtedly charging their European customers prices in Euro.
We've seen agencies in the Netherlands, Spain, France etc. actually posting jobs on Proz with rates in US$$. That's something I find particularly disgusting.

Sorry, but I fail to see what's disgusting about that - the EUR/USD exchange rate is one of the most transparent market prices worldwide.

I generally quote in euros only, but if need be, I would be prepared to quote in any freely-convertible currency...

Best, Ralf


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remyrosf
Local time: 08:52
English to French
Yes, but... Jan 4, 2006

[quote]RobinB wrote:

"Consensus estimates see the euro nudging USD 1.30 by the end of this year. "

Last year, when the euro was around 1.36 USD, "consensus estimates" projected that it would continue to rise in 2005 - it lost 11%. Could this be the start of a new cycle?

Regards,

Rémy Rosfelder


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Henry Dotterer
Local time: 02:52
SITE FOUNDER
There may be good reasons Jan 4, 2006

writeaway wrote:

... and undoubtedly charging their European customers prices in Euro.
We've seen agencies in the Netherlands, Spain, France etc. actually posting jobs on Proz with rates in US$$. That's something I find particularly disgusting.

They may be doing this because their customer is paying USD, and this is the best way for them to avoid the risk of currency fluctuation.


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RobinB  Identity Verified
Germany
Local time: 08:52
German to English
USD prices Jan 4, 2006

writeaway wrote:
... and undoubtedly charging their European customers prices in Euro.
We've seen agencies in the Netherlands, Spain, France etc. actually posting jobs on Proz with rates in US$$. That's something I find particularly disgusting.


It may happen. But it may also be the case that the European agencies have priced their projects in USD, so they're keeping things simple by retaining USD as the entire supply chain currency.

To be honest, the paperwork and cost to a European company of paying suppliers in the EU in dollars probably doesn't make it worthwhile in the first place unless an entire contract is also priced in dollars, e.g. they're being paid in dollars into a USD account in the first place. And as Ralf has pointed out, a translator would have to be particularly gullible not to spot that a project is being priced in USD rather than EUR. I don't find that disgusting at all. What I do find extremely unfortunate is that there are clearly many ProZ members in Europe who are quite willing to accept subsistence rates for translation work, irrespective of the currency in which they're denominated. And then they complain about the rates....

Robin


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RHELLER
United States
Local time: 00:52
French to English
+ ...
could it be a mistake? Jan 4, 2006

Hi Philippe!

The exchange rates have varied over the last few years.
I work a lot with European clients and am happy to invoice in either currency. I check the exchange rate before offering both options.

I do not want to undercut my fellow UK translators and stick to my rates, although a few agencies have attempted some "highly creative" alternatives.

First, I would assume they made an honest mistake and simply re-send the original agreement (email in which you stated your rate and the currency). We all make mistakes.

If it is a case of dishonesty and your work was already completed, you could write that up in the blue board and avoid that agency in the future.


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Susana Galilea  Identity Verified
United States
Local time: 01:52
English to Spanish
+ ...
same here... Jan 4, 2006

Rita Heller wrote:
I check the exchange rate before offering both options.



This is my procedure as well.

All best,

Susana


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RobinB  Identity Verified
Germany
Local time: 08:52
German to English
"Mea culpa", writes Lex Jan 4, 2006

remyrosf wrote:Last year, when the euro was around 1.36 USD, "consensus estimates" projected that it would continue to rise in 2005 - it lost 11%. Could this be the start of a new cycle?


Lex in today's FT admits that the consensus this time last year got the 2005 forecast wrong. This time round, though, the signs really are pointing to a drop in the external value of the dollar. The Fed has signalled an easing in its monetary policy stance; interest rates are likely to rise again in the euro zone sometime next year; and above all the horrific current-account deficit in the US are all indications that the dollar looks set to slide, albeit possibly not until around the mid-year point.

Overall eurozone prospects are also somewhat brighter now, although the upturn here in Germany is basically cyclical rather than fundamental, the French economy is heading for trouble, and Italy clearly doesn't stand a cat's chance in hell of a convincing turnaround. These factors are all outweighed by what may well hit the US in 2006, though, where the situation is compounded by the apparent lack of any sort of economic policy whatsoever from the Bush administration ("cut taxes further and borrow more" isn't an economic policy, it's just an easy way to reward your friends).

So although the euro may strengthen slightly, many pundits are saying that it will be a weaker dollar that will drive exchange rate movements.

Robin


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xxxPFB  Identity Verified
Local time: 08:52
English to French
+ ...
TOPIC STARTER
Thanks everyone Jan 4, 2006

I'm not really bothered which way the dollar or the euro go (you can see I don't know anything about the economy!). What matters to me is that I get paid what I quoted, whatever the currency and whatever the rate of exchange. If I quoted say 100 euros, then that's what I want (120 us dollars, 75 pounds or so, etc...)

Nor do I really care, for the reason explained above, what currency the agency gets paid in.

I never start a translation until I get the client's PO, which is why sending the client packing was not a problem in this case: the translation hadn't been started. I did ask them whether it was a mistake but they said it was their understanding.

It's just that it's the first time that kind of thing has happened to me (admittedly, I don't work much with US clients anyway and those I have worked with have always paid me in euros) and I was wondering whether it was common practice.

If it is, it's worrying: in this case, given the current rate of exchange, it can mean a loss of up to 20%.

Thanks for your comments. Sorry I coudn't reply to them personnally but I don't know how to cut and paste bits of peoples' answers - some people do that very well!


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