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Did the US’s Advance to the Second Round of the World Cup Affect the Dollar?

By Yan Petters

Recently the entire world seems obsessed over 22 young men, chasing a ball in the attempt to score a goal. For some people, especially among North-American nations, it’s a completely new experience. Even though the U.S. has hosted the world cup in 1994, soccer isn’t consider to be a popular sport in America, and the population prefers other sports such as basketball, American football, and baseball.

Maybe it is the global competition that turns U.S. fans to watch the tournament, and maybe it is the stunning success of the American team that makes people cheer their national team, yet no matter what the reason is, one thing is certain – the U.S. economy can only benefit from this tournament.

Let’s see the figures behind this statement. The U.S. audience likes to watch sports in the company of friends, and they like to create the ‘perfect’ environment for the game – starting with large screen TVs, and continues with beers and snacks. ‘Wall Mart’ management estimates that sales will rise by 2% in the U.S, if the American team will scratch its way towards the semi-final.

Think that’s all? Guess again; U.S. TV networks ABC, ESPN and Univision paid a record $425 million for the broadcast rights of the 2010 and 2014 world cups, making it the biggest TV deal in a single country in FIFA’s history. They also understand the huge financial potential of this unique tournament. When Bill Clinton went to watch the U.S-Algeria match, he knew exactly why. If you want the American public to see you, that’s the place to be right now.

When Landon Donovan scored the winning goal against Algeria he thought about his incredible career, his nation’s glory and how this goal might have a good impact on people’s opinion over soccer. He probably didn’t even guess how retail sales of media products, food and sports wear could soar as a result. The American economy has just started recovering from its biggest crisis in 80 years, and the best thing it could hope for is a motive to get people to increase their consumption. It seems that the U.S. soccer team might have just given them that reason.

The impact of the world cup on the Dollar might not be direct, yet it definitely exists. For every round the American soccer team qualifies, more and more fans tune in, cheering their team, and as a result supporting the economy. Who knows? If Carlos Bocanegra (team’s captain) will eventually lift the holy trophy, we might even see the Dollar reaching new highs within a month or two.

Disclosure: no positions