Sometimes the reasons for the pennies in your pocket diminishing are a world away. At least the answers to your questioning mind may lie in the international money markets rather than in the local shopping centre.

Ever wondered why the US dollar dropped when hurricane Katrina made landfall on America's coastline in 2005, or why the euro and other currencies get stronger every time the greenback weakens?

How the currencies in the world exactly rise and fall against the US dollar remains a mystery to many people. But it doesn't require any shrewd analyst to decide whether a falling dollar is something to cheer about.

Last year, Brazilian supermodel Gisele Bundchen refused to be paid in US dollars and insisted on euro payments. The reason is obvious. Since the greenback has nose-dived against the euro, dollar payments will certainly dent her earnings. Gisele may not be a savvy currency expert, but her analysis was right.

Here in the UAE, the impact is palpable: the dollar's weakness is taking a toll on expatriates, whose earnings have plummeted along with the greenback.

A Dubai-based expat I know who has to pay 850 euros monthly for the apartment he loaned in Paris now shells out Dh850 more each month, granting that the euro doesn't go any higher than Dh5.40. His monthly bill has soared from Dh3,740 to Dh4,590 in more than one year.

In 2007, a worker from the Philippines was sending home 50 pesos for every dirham earned in the UAE. Today, it is only 40. In effect, a Filipino worker loses Dh100 for every Dh1,000. In the case of a Dh6,000 wage earner, the purchasing power loss is equivalent to Dh600, which could reach over Dh7,000 in one year.

Expert advice

The Association of Chartered Certified Accountants, the world's largest professional accountancy body, says expats and workers remitting money home need to take a long-term view. "Many currencies - not just the dirham - are linked to the US dollar and workers may find fluctuations in their homeland currencies, which may work for or against them in the short term, but will even out in the longer term," an expert from ACCA says.

Indeed, it is difficult for an ordinary consumer to decipher why the rupee, euro or peso strengthens every time America sneezes. Nor is it even an easy issue for governments to deal with, let alone the man or woman in the street.

So is it better then for expats to hold on to their dirhams and see if a stronger dollar is around the corner? There's a sense of that already in the air.

Some belt-tightening might work for a while, but it can't stop the erosion of expats' earnings. Very often, that's simply beyond your control.