In April, the UK pound moved through the $2 mark for the first time since 1992. The euro has also grown in strength against the US dollar. On one level, Cannes-bound US companies are bound to suffer. Bringing staff to the Riviera is not cheap, even when the dollar is strong. When it is as weak as it is now, an expedition to the Marche begins to look painfully expensive.

On another level, European buyers may be encouraged to buy US product at a '30% discount' as one US buyer puts it, while UK projects in particular suddenly seem very pricey. 'If we have $1m to spend, we will be more attracted to an American project than a British one,' says a London-based buyer.

However, Tim Haslam, London based CEO of the nascent Dreamachine, points out that North American distributors are still buying aggressively. 'Look at Summit. That's great news - another buyer. You've got companies like Think being more aggressive. I see that as a healthy line.

'The question is, are they producing enough films to fill their distribution line-ups of 15-20 films a year from their own production resources' If they're not, they've got to fill them.'

Indeed, if US companies want a UK or European film, they will invariably find the means to acquire it and most will hedge against currency fluctuations. 'It's an extra worry,' admits New Line's Alexandra Rossi. 'At the same time, if you are really aggressive about a film, it's not that which is going to stop you.'

'If films are priced in dollars, who will take the hit''
But not everyone agrees. 'For US buyers of European films, the cost of currency will be harder felt by the European producers as they try to sell their films to the US,' says Mark Horowitz of Los Angeles-based sales and co-production entity H20 Motion Pictures.

'I don't believe the American companies will necessarily pay more for the film, so that price they do pay will reflect a smaller percentage of the budget.'

'If films are priced in dollars, who will take the hit'' asks another buyer. 'Will the sales companies have to put the prices up''

It is not just the exchange rate keeping international buyers and sellers awake at night. Dreamachine's Tim Haslam points to the increasing difficulties distributors face in securing pay-TV pre-sales: 'More worrying than the exchange rate is the state of European and US TV pricing that has traditionally underpinned the independent pre-sale business. Distributors hedge their bets that when they pre-buy a movie, they get the value of the TV. They are losing that.'

Lisa Wilson of US sales agent Hyde Park International is not convinced the dollar is weak enough to overcome more local worries. 'For example, there is a lack of available screens in Japan, and problems for the clients selling TV in Spain and Italy.

'I believe strong product is something that will always be picked up, whatever the exchange rate, but the weaker films and those without domestic release attached will still be a tough sale.'

'It's costing sales companies, distributors and producers more'
The combination of the strong pound and the introduction of stringent tax laws in the UK make it almost inevitable there will be a negative impact on productions shooting in the UK - and in Europe - and those looking for US investors specifically.

'The cost of making films is not going down and the cost of providing finance for them is going up,' says Dreamachine's Haslam. Dreamachine now contracts its sales in euros as much as possible.

'When we contract in euros, we can lock the euro and buy our dollars. We have to place increasing safeguards. But there is only so much you can safeguard against. Ultimately, it's costing us more. It's costing the sales companies, the distributors and producers more.'

'It means we get a lot less money,' agrees Andrew Brown, director of London-based sales and financing outfit Intandem Films. 'The (American) financier we are talking to will give us less money because it's more expensive for them.'

'We don't put the same minimum guarantee as before'
European sales agents do not anticipate the weak dollar will affect their day-to-day business, as European deals are increasingly done in euros. 'The question is not whether we're going to win or lose 5%, it's whether we're going to find one or several buyers who are passionate about buying the film,' says The Coproduction Office's Philippe Bober.

The Coproduction Office generates more than 70% of its turnover in Europe. Similar statistics are likely to apply to other smaller sales agents handling European titles.

'The only effect is that when we acquire a film, we don't put the same minimum guarantee as before, as we have to take into account that the prices we will get from areas with the dollar are inferior,' says Wild Bunch's Vincent Maraval.

Most of Wild Bunch's deals are done in euros, but contracts with the US are still done in dollars. 'It is a market where you sell,' says Maraval. 'You don't really pre-sell, so you fix the price according to the market.'

Meanwhile, European sellers may use the plummeting dollar as leverage. 'As soon as a European buyer says that is too much, I say look at the exchange rate - you have just got a 20% discount in the last year on the value of that price,' says one London-based sales agent handling US product. 'It's a fantastic opportunity for them to be dealing with American companies.'

'As a sales agent I'm optimistic the weak dollar will create a buying frenzy,' says H20's Horowitz. 'Note to buyers, make sure you see me in Cannes.'