A strong dollar and weak dollar
Dis 7
A strong dollar means that anyone using the dollar can buy more foreign currencies, and the dollar has a high value than other currencies. In the case of a strong dollar, the U.S consumers are paying less for imported items, and the foreign consumers spend more when they import U.S products. In this scenario, the U.S consumers are enjoying, and they are the winners, and the foreign consumers are the losers because they are required to pay more. On the other side, a weak dollar means that one must use more dollars to purchase foreign currency. Therefore, the U.S consumers must pay more for imported items from foreign countries. When the U.S exports its products, foreign consumers spend less, and this helps in increasing employment and production in the United States. In this case, the U.S consumers will lose because they will pay more for imported goods and services. Also, they will still enjoy it because their products will be sold to foreign countries cheaply, thus increasing their production and employment opportunities. But exporters are likely the winners in the case of a weak dollar.
Yes, there is a significant impact on currency changes; as per the video, I see that a strong dollar favors U.S consumers because it makes imported goods and services that are enjoyed by the American consumers to be cheap. But also it poses a negative effect on the U.S exports, thus affecting their productivity and even employment. Nevertheless, a weak dollar is more favorable to foreigners, thus helps in boosting production and promotes more employment opportunities in the U.S. But the Americans will be affected by it as it will raise the prices of the imported goods and services. As per the current situation, we are told that the value of the dollar is anticipated to reduce, and I don’t think to buy things overseas will be that cheap but more expensive. According to Marc Chandler, who is a foreign currency trader, he says that speculations are one of the factors that cause changes in foreign currencies. Other factors can be economic performance and stability, terms of trade as well as changes in interest rates.