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Posts Tagged ‘exchange rate’

Uncertainty in Financial Markets Hits USB Flash Drive Prices

Tuesday, September 13th, 2011

The uncertainty in the global financial markets continues to have a direct correlation to the price at which companies can buy printed and promotional USB flash drives in the UK.

Like many products these days USB flash drives are manufactured, assembled and printed in China but unlike most other products USB flash drives tend to be manufactured to order and need to be delivered within a matter of days. The majority of companies that order USB sticks buy them for time critical events so speed of delivery tends to be key.

Global Financial Markets Affect the Price of Branded USB Flash Drives

The typical lead time from placing an order for branded USB sticks to delivery is around 10 days which is staggering when you consider that during that time they have to travel over 5,000 miles and pass through the hands of multiple organisations who manage and co-ordinate their manufacture and their safe passage through customs and a maze of road and flight connections.

The downside with this demand and supply model is that local UK pricing is tightly linked to the US Dollar exchange rate. China trades with the rest of the world in US Dollars so the core components that go to make up a USB flash drive (flash memory, flash controller chips, and housing) are all traded in dollars. Few USB flash drive suppliers and factories hold stocks preferring instead to buy the components as the orders come in which exposes them to movements in the currency markets

Over the last couple of months the Pound (GBP) has fallen from around 1.65 to 1.575, which is a fall of just under 5%. The weakness in the Pound (GBP) ripples through to end-user pricing which has increased by 5% to compensate for the exchange rate falls.

Unfortunately the immediate outlook is not good. Today’s UK inflation figures showed another rise to 4.5%, Europe is still gripped with fear over the Greek debt situation and the rate Italy has to pay on new Bond Issues today increased to 5.6%. This continued “drip drip” of bad news from Europe combined with weak growth and high inflation in the UK means the market sentiment towards the Pound (GBP) is unlikely to change any time soon!

If you are looking to buy printed USB flash drives or place re-orders don’t be too surprised if the prices have moved up a little. No one is trying to profiteer it’s just a reflection of the volatile market conditions.

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Uncertainty in Financial Markets Hits USB Flash Drive Prices

Branded Flash Drives – Prices Fall As Sterling Exchange Rate Recovers

Wednesday, August 4th, 2010

There has never been a better time to purchase branded memory sticks. Several factors have come together to make the perfect storm allowing the sharp fall in Branded Memory stick prices. The two primary drivers are a six month high for the UK Pound against the US Dollar and an over capacity of flash memory in the Far East.

The exchange rate has continued to improve given that it hit a 14 month low in May. Since that time, Sterling has risen by more than 11 percent, due especially to the stronger than expected news about the UK economy and the austerity plan put in place by the new government. Investors who bet against the UK Pound have been forced to unwind their deals, which helped to push the UK currency higher.

This has also been helped by the fears that the US economy may not be doing as well as investors had hoped.

Why is this important for the price of branded memory sticks? In short, almost all Flash chips used for Branded Memory sticks are manufactured in the Far East and the US Dollar is the preferred method of payment. Branded Flash Drives are more susceptible to short term currency movements because orders are placed on factories and paid for as customers confirm their requirements. Whilst some forward buying of stock does take place the wide range of styles, colours and memory sizes coupled with the fact that many customers take advantage of pantone colour matching the body of Memory Sticks it is impossible to forward buy too much.

With the improvement in global transportation and the ability to manufacturer and ship within a few days rather than weeks more Branded Flash drives are manufactured to order, hence why currency variation has such as dramatic bearing on price.

There is also a lull in the manufacturer of electronic items, which has reduced the price of flash chip, the core cost for any Branded Memory Stick.

So will this last? Whilst all the underlying factors are improving the currency rates have been so volatile over that past months that it is difficult to predict whether this will continue on an upward trend or in fact fall back again.

What is certain is that the demand for flash will increase over the coming weeks in preparation for the Christmas trading period and this will drive the price of flash up. Especially for 1Gb and 2Gb memory sticks.

So if you are thinking of purchasing Branded Flash Drives, anytime over the coming months, then it may be prudent to secure today’s price as there is no telling how long the perfect storm will last.

Branded Memory Stick

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Branded Flash Drives – Prices Fall As Sterling Exchange Rate Recovers
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