WEAK GREENBACK BRINGS CHEERS - AND FEARS

       When quality manager Jackie Phang learnt that her husband was travelling to the United States for a business conference, she was in two minds whether to fly over and join him there for a holiday.
       What tipped the scale in the end? The weak US dollar, which has fallen about 8 per cent against the Singapore dollar since February. This made US vacations cheaper for travellers from the city-state.
       "I had my mind on the shopping and with the US dollar so weak, we can buy a lot more things with our cash," said Phang.
       The US dollar hit a low of $1.42 last week. It has dropped from a high of $1.55 in February, as investors, betting on a global economic recovery move their money from the "safe haven" greenback into higher-yielding assets.
       The favourable exchange rate is drawing more Singaporean tourists to the US and other places that peg their currency to the US dollar, such as Hong Kong.
       But while a stronger Singapore dollar makes holidaymakers a happy bunch, it has a mixed effect on businesses that deal in US dollars.
       Food supplier Indoguna, which imports products from more than 20 countries, said the declining US dollar had resulted in cost savings of between 1 per cent and 5 per cent. About 70 per cent of the items it brings in are transacted in US dollars.
       "The fall in the US dollar makes it slightly cheaper for us, but we won't benefit fro the full difference in the exchange rate as there are other escalating costs such as rental and operating expense,' said chief operating officer Wayne Goh.
       Still, the savings Indoguna achieves from the weaker US dollar help it price products more competitively, he added.
       But other companies said the exchange rate has hurt them.
       Chow Yoke Keng, chief financial officer at UST Technology, which sells and distributed equipment to micro-electronics firms, said her company's profitability has been reduced by about 20 per cent.
       "I buy and sell in US dollars, so my gross margin is affected," she said.
       The dip in the greenback has also caused the Hong Kong dollar to slide against the Singapore dollar, encouraging more tourists to visit the territory.
       "Because of the exchange rate now, Hong Kong is even more attractive," said Ruth Lim, marketing and communications manager at SA Tours. The company sent 6 per cent more tours to Hong Kong last month compared with the same period a year ago.