Few restaurants are quite as closely associated to America as McDonald’s, but interestingly enough, McDonald’s is currently thriving much more in other parts of the world. What’s more, McDonald’s has reported that growth continues to slow in the United States, perhaps signaling a shift in attention for the restaurant chain.
 
Unfortunately for McDonald’s, overall sales were down 0.4 percent in the month of May, mostly attributable to the strengthening dollar. However, U.S. stores have seen a general decline in growth, with May of last year bringing in a 4.3 percent increase in sales while this year, sales only increased 2.8 percent. In Europe, sales are up 7.6 percent, with similar positive situations all across the world.
 
As the world suffers from the economic crisis, McDonald’s remains a quick and inexpensive way to secure a meal for one’s family. Even though McDonald’s sit-down counterparts have overwhelmingly reported declines, McDonald’s has managed to stay relatively strong. 
 

Image: Flickr

Depending on where your investments lie, you may or may not be upset by the news: although gold futures have dropped 2 percent today, lower-than-expected job losses have propelled the dollar upwards. Traditionally, the value of gold increases whenever the dollar loses value as investors look for a safer place to invest their money, but this development shows that the opposite holds true as well.

Image: Flickr

According to a recent report by the Labor Department, applications for unemployment insurance have finally begun to slow down, showing their first decline in numbers in a long while. Analysts seem to agree that employers are cutting jobs much faster than what the economy needs to recover, but an increase in the value of the dollar should stimulate hiring.

This news, along with other recent developments, seem to show that the economy may be turning around. Still, the unemployment rate remains at staggeringly high levels, signaling that we are far from back to normal.

Just when we were getting used to the weak dollar, the greenback has hit a little bit of a recovery. According to the FT, it may well last a while. The Economist’s Big Mac index suggests it was overdue anyway.

The dollar’s day may well be over, at least as the sole refuge in hard economic times. As discussed in this article in the Financial Times, the dollar has been the currency of choice when times get tough for over fifty years, due in large part to the size of the US market and the strength of the financial sector. Now that financial sector is weak, and the strong Euro is quickly supplanting the dollar for major international transactions (as well as Giselle Bündchen photo shoots).

Now, the Euro has been increasingly served as an alternate currency in international transactions over the past few years, but the FT posits that the current economic troubles will be enough to earn it a pole position in the no-longer-new century. What do you think?

The dollar’s weakness has been a very big story this year, and one which I’ve followed with keen interest. On one hand, as a fairly frequent traveller, the high euro has made those trips much more expensive. On the other hand, as an attorney who charges fees in dollars, my fees have become more reasonable over the past year, which I suppose should help my business (at the same time making my home market less attractive). The change over the last year is very evident when you look at this chart from indexmundi.

I’m not much of a pop culture type, but when hedge fund managers and supermodels like Gisele Bündchen are both avoiding the dollar, you have to wonder if there’s any way to turn things around. I’ve seen a number of predictions of a recovery, if not a robust one, in 2008. That said, I think the Economist’s extremely cautious optimism is about the best we can hope for. That means those of you selling in Euro or pound will continue to suffer in the US market, as will those of us earning and buying in dollars.

image from gisele-bundchen.info