Why a New York Cheese Buyer Hangs On the Euro’s Fate

Steady currency exchange rates smooth the way for global trade. But the threat of default by Greece, Italy and other European nations has reduced the value of the euro and upset predictability in pricing. Reporting for National Public Radio, David Kestenbaum explains the effect of the euro crisis on a small cheese shop in New York City: “Through his cheese deals, Foster essentially trades in global currency markets,” says Kestenbaum about Aaron Foster, a cheese buyer at the New York store. The buyer pays for the cheese not in US dollars but in euros and then must arrange for transport to a nearby port, also paid for in euros. The threat of default has led to a drop in the euro’s value and the price of cheese. The price difference is a bonus that goes to the cheese buyer. About 60 percent of the shop’s cheeses come from Europe. Volatility in currency values adds to uncertainty that could affect longstanding trade relationships. – YaleGlobal