The weak American dollar helped keep the nation’s yearling market from suffering a bigger downturn than it could have last year, according to many people. While Coolmore Stud and Sheikh Mohammed continued to be important players, the favorable exchange rate helped boost the enthusiasm of other foreign buyers. Their investments made up, in part, for some of the money lost to the auction business when Sheikh Mohammed sharply cut his spending for yearlings and the United States’ economy started to slow down.
But this year, foreign countries are starting to experience many of the same economic woes as America. In June in Japan, the unemployment rate rose; wages and industrial output fell, and consumer prices increased. Ireland’s economy shrank during the first quarter of 2008, and in England, the number of new mortgages being approved has plummeted to a record low. Retails sales in the United Kingdom fell 3.9% in June.
Such setbacks aren’t the best news for yearling consignors, who were hoping that foreign spending alleviate some of the effects of the worsening American economy. But Lincoln Collins, an international bloodstock adviser, believes foreign interest in young horses could still be strong.
“I think there will still be foreigners buying because the dollar is still very weak,” said Collins, who was inspecting yearlings prior to the Fasig-Tipton Saratoga select yearling sale in New York. “While the economy is down here and down overseas, the fact is, if you’re looking at the British pound, for example, it’s still a very good value.”