It's about London, but Americans here are dealing with the same issues.

Dropping dollar cramps style of Americans abroad - The Boston Globe

LONDON - Karla Keating and her husband had retirement on their minds in May when they got what they considered an offer too good to refuse: a three-year stint in London.

Coming from North Carolina, they knew it was going to be a bit of a financial leap. But the major US bank where her husband is an executive lured him with a 33 percent increase in pay. Within weeks, they had crossed the ocean and found a nice flat near Marylebone for 1,820 pounds - about $3,750.

"The estate agent told me the price, and I said OK, I guess that's kind of comparable to prices around Europe. And he said, 'That's the price per week,' " Keating recalls. Since then, it's been all downhill.

The iPod Nanos for the children cost 99 pounds apiece (about $204), compared with $149 in the United States. Keating's six-Diet Coke-a-day habit got shaved quickly to one, at $2 a can. They sit at the end of the day on their small balcony overlooking Great Portland Street, and her husband smiles (sort of) and says, "Here's your $12 glass of wine."

"When I got here I was like a deer in headlights. I was just, 'Oh my God' about everything," Keating said. "We figured out that with the increasingly weakening dollar, in reality he is making less than he was making 20 years ago."

The falling dollar has been a boon to US manufacturers, and a windfall for the American tourism and retail industries, as Europeans flock to the United States for cheap holidays and shopping. But it has been an exercise in sticker shock for Americans living abroad, particularly in Europe, where the euro and the pound sterling have been expanding against the dollar for more than a decade.

Here in London, a pound that was worth $1.58 in 1995 was up to $2 last spring. In November, it hit $2.10, with a 10 percent rise over the past 12 months.

For Americans and other expatriates paid in dollars, it makes for constant mental arithmetic whose solution is reached by doubling the price of everything in sight.