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CURRENCY MOVEMENTS AFFECT STAMP PRICES

Authored by: Richard Lehmann

As you may be aware, the U.S. Dollar is on the rise, averaging over 10% so far in the last 12 months. For stamp investors, this is a moment of opportunity even if you don't travel internationally. The Internet is a giant bourse where sellers from different lands, using different catalogs, are making stamp offerings mainly to fellow citizens. Hence, if their currency has slid 10% or 20%, they don't adjust their prices since their domestic client base will see no changes until the next update of their favorite catalog. This could be a year or more away and may not reflect any changes if it is published using local market and currency values.

An investor in stamps recognizes that pricing disparities always exist in stamps and look for opportunities to arbitrage the valuation differences between catalogs. When you have significant currency movements in a short period of time, many of such currency movements create compelling buying opportunities. While we at StampFinder.com are continually identifying investment grade stamps based on historical appreciation, catalog valuation disparities and other variables; the movement of the currencies used to price stamps adds an entirely new dimension. For example, a European based dealer will be offering stamps from anywhere in the world using a Michel or Yvert catalog. Those catalogs are not published annually, hence the 28.3% erosion of the Euro against the U.S. Dollar represents a significant discount for a U.S collector. Even if a dealer's website shows dollar prices for U.S. collectors, this does not mean the prices have been adjusted. Only a comparison with a U.S. based dealer and a Scott catalog will determine if a better buying opportunity exists. For dollar based auction buyers, a European auction may be one of the best opportunity areas since you are bidding mainly against Europeans, whose currency won't go as far.

Stamp prices, over time, tend to migrate to the highest catalog values. It's like the saying, "A rising tide lifts all ships." Below is a table of currencies movements from March 31, 2014 until March 31, 2015 measuring various currencies against the U.S. Dollar. The dollar rally is not over and may last for years, but stamp dealers will wake up sooner than later, so the time to look for buys may well be today.

Currency Rates and 12 month change as of March 31, 2015:
(In local units per U.S. $1)
Euro .9318 28.3%
British Pound .6748 12.4%
Japanese Yen 120.12 16.4%
Canadian $ 1.2686 14.8%
Israel Shekel 3.9780 14.2%
Swiss Franc .9726 9.9%
Australia $ 1.3146 21.8%
Swedish Kr 8.6255 33.3%
Danish Kr 6.9622 28.4%
India Rupee 62.31 4.1%
Mexico Peso 15.265 16.9%
Norwegian Kr 8.0614 34.6%
Russia Ruble 58.211 66.0%
Note: The Chinese Yuan and the Hong Kong $ are pegged to the dollar.

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