These days, the art market is so international that it’s easy to forget that currencies still have borders. And the recent weakness of the once-almighty dollar has been redrawing the map for dealers and collectors alike. From June 2007 to June 2008, the euro went from $1.35 to $1.55, and since its adoption in 2000 it has gained some 60% against the U.S. dollar. The disparity is flooding American fairs with Europeans, keeping American buyers home and nurturing an industry that seeks to make art more of a liquid asset as it moves prized pieces to strategic markets across the globe.

With European registration up 33% at The Armory Show in New York this past March, collectors were greeted by a surprising and novel sight: artworks marked in euros instead of dollars. The strategy, while not widespread, was not uncommon. Armory Show director Katelijne De Backer says, "I heard collectors from Europe saying it’s great to come art shopping in New York because the euro is so strong." And some dealers from the other side of the Atlantic are feeling doubtful about their American clients’ buying power. One collector, James Pollack, watched as a European dealer "absolutely refused to sell something unless the collector used a credit card, even though the buyer was willing to let the check clear in dollars before the piece was sent," he says. "That shows you how weak a position American collectors are in these days."
 
"I think Americans will go quiet on the exhibition front," says Philip Hoffman, chief executive of the Fine Art Fund, a London-based art investment group, talking from a car speeding through downtown Dubai. "And Europeans will now look to buy in dollars. Clearly currencies are playing a stronger role in what we do." Hoffman, who previously worked for Christie’s, believes that American art could be ripe for choice pickings, acknowledging that his fund, with more than $130 million in investments, recently purchased $1.5 million of "American 1960s art," not naming the artists for fear of creating a rush. "It’s a strategic purchase."

"New York is becoming a shopping extravaganza for Europeans because there’s a built-in 30% discount in the dollar, and we’re selling at London auction houses because we want that percentage," explains Ian Peck, CEO of Art Capital Group. The New York-based financial services firm loans money against art, providing acquisition financing and lines of credit to galleries, dealers and private collectors. He notes that profits are up "maybe 10% or more because of how we’re handling the currency issues." Peck and his group advise on where the best global markets are to sell particular works, whether it’s Hong Kong, London, New York or Dubai. While New York is still the world’s art center, the U.S. economy is taking a toll on local collectors, Peck observes, "even the wealthiest collectors." These days, he says, Art Capital is more often "dealing with the French, the Swiss and Spanish. Europeans are walking around New York feeling peppy."

Luxe Gallery director Stephan Stoyanov has noted this phenomenon and says that the past winter saw strong sales for his gallery in New York—from Europe. "One first-time collector from Belgium bought several pieces by Ellen Harvey, a French collector scooped up works by the same artist and a pair of Japanese buyers bought massively," he says. Did they act now because of the exchange rate? "Absolutely."

"The currency situation does make you cautious," says American collector Blake Byrne, a retired television executive, "although for Europeans, American art is priced attractively now." While Byrne buys work in both Los Angeles and Paris, where he maintains homes, he was stunned to see prices this spring in New York posted in euros. "If it’s 200,000 euros—well, that’s $350,000!" For selling work, Byrne favors the large global auction houses. "Christie’s, Sotheby’s or Phillips will allow a seller to reach a global audience with their extensive networks and deal better with the euro," he says.