The Global Implications of a Rising US Dollar

There are a lot of great things to be said about the United States economy right now. As US markets celebrate their longest ever growth streak, economically, a lot of Americans are satisfied with their financial well-being. Unemployment fell to a 50-year low, falling from 3.9 to 3.7 percent in September, as the US economy added another 134,000 jobs and companies have been steadily announcing payroll increases. In the third quarter, wages grew 3.4 percent, the fastest pace in over a decade. Amazon shocked the country by announcing its new $15 minimum wage for US workers, a policy that will go into effect next month, and is yet another sign of the best labor market in over a decade.

In the midst of this positive growth, the US Dollar continues to perform well as we enter the fourth quarter. US treasury yields are their highest since 2011, the dollar hit an 11-month high against the yen, and even the pound slipped to below $1.30 as the Dollar continues to sneak up. This means many Americans will enter the holiday season not only more eager to spend, but perhaps more eager to travel, as the Dollar’s value continues to rise globally. While spelling great news for US citizens, what does this mean for others around the world? Specifically, emerging markets across the globe are very aware of the recent trend of the Dollar, and in many cases, are facing potentially severe implications if the rapid growth continues to be a trend.

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Currency exchange rate sign in downtown Buenos Aires, Argentina, where the Argentine peso has fell significantly in 2018.

One key indicator of economic and monetary prosperity is the Federal Reserve benchmark interest rate. The Fed tends to raise rates during a strong economy to contain excesses and make sure the economy continues to grow stably, and tends to lower rates in times of economic struggle, in an effort to boost spending and borrowing. Currently sitting at a range between 2% and 2.25%, the Fed raised the rate for the third time in late September, and plans to raise it again sometime in December, and the plans don’t stop there. In June, when the Fed laid out its long-term objectives, it tentatively planned three more interest rate increases for 2019, and one more for 2020. The rates can also help ensure inflation rates are steady. The current inflation rate of 1.9% is very close to the Fed’s target of 2%. This is a very significant outline, as it tells us that the Fed predicts the US’s growth to continue through 2020.

 While signaling stability for the US Dollar, the Fed’s interest rate increases can negatively affect foreign markets, especially those who have borrowed heavily in US Dollars. As it stands, the US is still, by far, the dominant global reserve currency, accounting for 63% of global reserves. Many countries around the world issue Dollar-denominated debt, and debt levels become exaggerated with the rise of the Dollar. While interest rate increases work in strong economies such as the US’s, the same increases constrain countries where economies are not doing as well. It hurts policy options in regions with tight financial conditions and high trade tensions. While the US market enjoys a growth streak, the markets of emerging countries have on average been declining throughout 2018.

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The Indian Rupee hit an all-time low this year vs. the US Dollar.

Emerging markets, which often rely heavily on foreign investment, will be hurting the most. In emerging Asian markets, the Indonesian rupiah hit a 20 year low in 2018, and the Indian Rupee hit an all-time low vs the Dollar, hitting 73.77. In South America, the Argentine Peso, which was placed at 18 vs the US Dollar in 2017 and was relatively stable, rose to over 40 in 2018. The Brazilian Real hit 4.15 this year, while being in the low 3s during 2017. In the Middle East, the Turkish Lira, which has been in the 3s for the last half decade, has reached above 6, and in Africa, the South African Rand has increased to over 15 despite being as low as just 11 last year. While these are some of the more extreme examples worldwide, and while there are plenty of other internal issues at play, it still marks a global trend of struggle against the US Dollar. The reality is, foreign investors are crucial to the success of emerging economies, and investors become more and more reluctant to invest abroad in times of such volatility.

This brings up an intriguing ethical debate, that is, should we, as Americans, really care about the economic struggles abroad? After all, with turbulence abroad, investors have turned to the relative stability and strength of the US markets, increasing investment in 2018. With our government’s “America First” policy, jobs have finally been increasing again over the past few years. Despite this, I worry about the tough implications that emerging economies are facing right now. Worldwide market collaboration and investment drives innovation and success and can move different people and cultures together forward Of course, the reality is a lot more complicated, but I still see success, especially in emerging markets, as a positive thing, and it is important to keep in mind that US markets affect these markets more than we think.

 

 

Sources:

https://www.cnbc.com/2018/08/31/argentina-peso-sell-off-stops-as-investors-await-governmnet-plan.html

https://www.thenational.ae/business/economy/us-dollar-here-to-stay-as-main-reserve-currency-says-moody-s-1.770003

https://www.thenational.ae/business/money/us-dollar-takes-centre-stage-in-the-financial-universe-1.728368

https://www.indiatimes.com/news/india/indian-rupee-is-not-alone-here-are-5-worst-performing-currencies-in-the-world-352157.html

https://www.wsj.com/articles/the-tricky-part-of-the-feds-next-rate-increase-1536831001

https://www.businessinsider.com/how-the-fed-raises-interest-rates-2017-12

https://www.ft.com/content/bcfa7bf0-b4a1-11e8-bbc3-ccd7de085ffe

https://www.scmp.com/comment/insight-opinion/united-states/article/2167616/how-stronger-us-dollar-and-higher-crude-prices

https://www.theguardian.com/business/2018/oct/04/soaring-us-dollar-threatens-trouble-for-emerging-markets

Controversy on the Court: What Will the Tennis World Do Next

On September 8th, Serena Williams faced Naomi Osaka in the US Open Final match when it quickly spun out of her control. Williams became engaged in a heated dispute with the match umpire Carlos Ramos after she was handed a series of code violations that made her lose points at a critical time in the match.

Ramos first gave Williams a violation for making eye contact with her coach who was in the stands watching, which is illegal as players cannot receive coaching during their matches. Ramos then gave her a second violation that resulted in the loss of a point for her smashing her racket on the ground in frustration. For the last straw, she finally received a game penalty for verbal abuse after she confronted the umpire, claiming that he stole a point from her and that he was a “thief.”

In the aftermath of the controversy, the International Tennis Federation defended Ramos and said he was within reason for handing out the rule violations. Williams unfortunately ended up losing the match. In her news conference afterwards, she claimed that she did not believe that what she said was bad in comparison to what male players say to umpires. As the dispute started trending on every website and social media, former players also backed her up on this.

Famous tennis player John McEnroe admitted that in his playing days he said much worse without getting penalized for it. Billie Jean King, a tennis legend and equal rights advocate, tweeted, “When a woman is emotional, she’s “hysterical” and she’s penalized for it. When a man does the same, he’s “outspoken” & there are no repercussions. Thank you, Serena Williams, for calling out this double standard. More voices are needed to do the same.”

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Tennis legend Billie Jean King was one of many athletes that emerged to support Serena Williams.

If there is to be a stop to this type of sexism in the tennis world, Serena is the best to lead and advocate for this change. The greatest female tennis player ever, and the face of the tennis world, her entire career she has dealt with people loving to hate her not only because she is a female, but also because she is a minority. People don’t just dislike her, they love to hate her. This passion is not over a specific reason. They don’t hate her because of the way she acts or who she is. It is purely because they don’t want to like her and want to see her fail.

There is a glaring double standard in the way that men and women are treated in the sports world, but also in tennis specifically. What women are allowed to say, what they are allowed to wear, and how they should go about being angry or frustrated is all held to a different standard than men.

For example, Serena received backlash from the president of the French Tennis Federation Bernard Giudicelli in August after she wore an all-black catsuit in one of her French Open matches. He cited that it was disrespectful to the game. Williams countered by saying that the suit was not just for aesthetic reasons, but that it in fact helped her from developing blood clots during the match, something she has struggled with since becoming a mom last year. Men have always worn colorful outfits during their matches and suffered no backlash from it. Why can’t women do the same? Isn’t this entertainment after all?

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Beyond that, however, inside women’s tennis, there are also different standards for how African American women are allowed to conduct themselves on the court. Serena and her sister Venus always have to deal with things differently compared to other female players in the specific outfits they wear, the way they style their hair, and how well-spoken they are in off-court interviews.

Not judged for their tennis skills on the court, they have to play opponents while people are in the stands wanting to see them not succeed. The mental strength it must take to actually stay strong through that and stay focused on their tennis goals and not be affected from other people cannot be understated.

The tennis world needs to make a change. While such a big event like this made us take a hard look at the sexism that is in the sport, we need to realize that problems like these have been happening for a while. Only when we acknowledge the misogyny around us can we begin to make steps to fix it.

 

 

Sources:

http://www.nydailynews.com/opinion/ny-oped-what-tennis-umpires-need-to-learn-20180913-story.html#

 

https://www.cnn.com/2018/09/09/us/serena-williams-sexism-tennis-controversy/index.html

 

https://www.tennisworldusa.org/tennis/news/Serena_Williams/60311/john-mcenroe-defends-serena-williams-i-have-said-far-worse-/

 

A Closer Look Into One of the NHL’s Best Marketing Strategies

If you live in or around Pittsburgh, it’s likely you’ve heard of the Pittsburgh Penguins, but have you ever thought about the marketing strategy behind the Penguins organization? Does a sports team in Pittsburgh even really need a marketing strategy? Well, they do. To keep growing its fan base, the Penguins have had to continually evolve their marketing campaigns.

In 2007, the Penguins began targeting their fans through mobile technology when they worked in collaboration with Vibe Marketing Group. Both parties worked to create the Pens Mobile Club(1), which has, since 2010, expanded into the Pens App. The creation and promotion of the Pens Mobile Club increased the membership of their club from approximately 14,000 members to 74,000 members(1). The Pens App has many features, including updates throughout the game and Game Day Previews. Videos and articles fill the home page of the app covering topics from “Verizon Coach’s Corner” to “Pet Calendar Shoot.” Through the app, fans can also sign up for the Pens Pass Last Minute Ticket Club. Once signed up, fans receive a text message when last minute tickets, including playoff games, are available in the FedEx Level or the Giant Eagle/Snapple Level. App users also have access to podcasts, Fan Central, and players’ stats throughout the season. The app is free and available to download for iPhone and Android users by searching “Pittsburgh Penguins” in the app store.

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Fast forward to 2010, the Penguins organization teamed up with Gatesman, Marmion, Drake, and Dave, Inc. to restructure its marketing campaigns(2). Coming out of the 2009-10 season, the Penguins finished fourth place in the Eastern Conference. This was an upsetting outcome based on the Penguins winning the 2008-09 Stanley Cup. To continue to incorporate the fans and continue to build upon their foundation, the Penguins presented their newest slogan “Destiny Has A New Home”(2).  An additional tie-in to this slogan, the Penguins were finding a new home in the Consol Energy Center (now PPG Paints Arena) at the beginning of the 2010 season. This move into a more modern arena from Mellon Arena (also known as the Igloo)  aided the Penguins in being able to be more technological when it came to marketing strategies and fan engagement. The marketing slogan helped to bring focus to this change, but also show the fans the continued commitment to excellence they came to expect of the Penguins.

The Penguins marketing team seems to identify early on what moves will be needed to keep up with current marketing strategies. Since 2010, and especially in the last three years, there has been an increase in the Penguins social media content becoming more geared towards fan interactions. No longer are its posts strictly related to the score of the game or other game-related information. The organization tends to focus on off-ice accomplishments and interactions more so in their social media – which helps grow that connection between fans and the organization. A prime example where the organization builds on previous posts made – last season the Penguins posted about the players’ love of Mario Kart. This season, the Penguins posted a video of Jake Guentzel and Patric Hornqvist playing a live-action game of Mario Kart. Matt Murray also announced yesterday that he will be making a $30 donation for every save he makes during the season as part of his “Saves MATTer” charity program(3). If this program would have been implemented last season, he would have donated over $38,000 to youth organizations(3). If you talk to fans, they feel like part of the Penguin’s family. Players are called by their first names and nicknames in casual conversation (i.e. Sid the Kid, Geno) and if you didn’t know better, you would think these fans were neighbors with the players. The Penguins really do a fantastic job of creating that connection between fans and players and having it be a positive experience for all involved.

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Even with the major overhaul in 2010, the Penguins continue to improve their interactions with their fans going into the 2018-19 season. This season, the Penguins are doing away with PensPoints and looking to launch a new program in November, the Pens Instant Win Program. Very little is known about this program because the organization is not relaying any information to the public at the moment.  

The Penguins are also active on multiple social media platforms, including Pinterest and Facebook. Although their Pinterest account hasn’t been updated for the 2018-19 season, fans can still follow many boards that include#PensValentines, Wedding on Ice, and Holiday HapPENings. The Penguins also have a fan interaction board for pets.

 

While creating content on multiple platforms, the Penguins seem to post the most content on their Twitter profile. The Penguins use this platform to interact with fans, as well as give game updates, practice updates, etc., which are typically in real time, as well as posting off-ice content. For example, I tweeted the Penguins and in less than 30 minutes, they had responded. You can also find many of the Penguins staff tweeting about behind the scenes information, like a sneak peek at Matt Murray’s mask before the preseason started (which garnered 619 Retweets and 4,070 likes) and their take on current happenings in the hockey community.  Two of the best examples for incorporating off-ice accomplishments into the Penguins marketing are posts about an article on Jake Guentzel’s rise to fame and Bryan Domoulin’s “hat trick of summers.” Plus, to no one’s surprise, a big “Happy Birthday” to Sidney Crosby and Evgeni Malkin together received 6,412 Retweets and 21,246 Likes. Their most recent high impact tweet was their reaction to the new Philadelphia Flyers mascot, Gritty, with over 15,000 Likes. The Penguins Snapchat and Instagram stories are great for behind the scenes look at warm-ups, practices, and time with the players – on and off the ice.

The Pittsburgh Penguins marketing strategy is much like its team; it has evolved through the years. It has found new ways to bring fans into the sport, just as it has brought new team members to the club. Yet it has maintained its loyal following, just as it has managed to maintain some of its key players, such as Mario Lemieux. It is easy to see how the Penguins tap into modern culture, while still looking back on great athletes that have passed through the organization, to include multiple generations of fans in the organization.

To date, the Penguins have a strong social media following and a solid fan base to lean on. However, to continue to bring new fans to the organization, the Penguins will have to maintain its current level of fan interaction through social media, as well as stay one step ahead of the current trends. When attempting to build the fan base, the mindset of listening to fans important, but the follow through with related actions is what will keep the Penguins at the forefront of many hockey fans’ minds. The KeyBank Challenge videos posted throughout the season seem to be a major selling point to fans who want to feel like they are getting to know the players more personally. This personal connection will not only help maintain the current fan base, but will continue to bring in more fans as the Penguins progress through the 2018-19 season.

 

 

  1. https://www.prnewswire.com/news-releases/pittsburgh-penguins-score-on-marketing-power-play-with-vibes-media-103434534.html
  2. https://www.nhl.com/penguins/news/pens-launch-new-marketing-campaign/c-537777
  3. https://www.nhl.com/penguins/news/matt-murray-charity-program/c-300581156