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The Strength of Dollar Paper

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The Strength of Dollar
All words have their certain meanings. For instance, “strong” and “weak” are usually
considered opposite of each other, so one might think strong is good and weak is bad, in general
meaning. But when it comes to the value of currency, it’s not that easy to understand. The term
“strong” and “weak” are used to compare the value of currency (such as U.S. dollar) relative to
another currency (such as the Euro). The words such as strong and weak, rising and falling,
appreciate and depreciate, inflation and deflation are relative terms in the world of foreign
exchange. The U.S. dollar is not only used as a global currency but also as an exchange tool for
currencies.
A strong dollar means that the U.S. dollar has risen to a level that is near historically high
exchange rates for the other currency relative to the dollar. On the other hand, weak dollar means
the U.S. dollar has fallen in value compared to the other currency. Taking about the impacts of
the weak dollar, it does not have any effect on the price of American local goods and products.
Weakening dollar affects imports and exports, the United States exports find benefits with the
cheap price of American products in foreign market (Momoh, 2019).. Consumers have to pay
more for imported goods since when the value of dollar is weak, currency buys less of a foreign
country’s goods or services. While a strong dollar means that the currency buys more of a
foreign country’s goods or services, which is good for the consumers because the things
(imported products) they want to buy are cheaper.
It does not matter whether the value of a currency is strong or weak, it always has impact
upon the business and global economy. Many people believe that declining value of a currency is

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a bad thing, instead weak dollar presents several profit opportunities. The weak dollar usually
limits the purchasing power internationally, so people with export business can have negative
impact. While the domestic business can make a good amount of margin boost through the gross
domestic product during an economic downturn. Because exported goods cost less, foreign
buyers purchase them in greater amounts. In United States, U.S. dollar and the gas prices has
inverse relationship between each other. When the value of dollar weakens the price of gasoline
increases because the nation depends, at least on imported oil (Momoh,2019). So, the strong
dollar and weak dollar each have positive and negative effect. A strong dollar helps U.S.
consumers because it makes foreign products less in price. However, it hampers the U.S. exports
which consequently affects U.S. production and employment.
U.S. business can benefit from both strong and weak value of currency. A weak currency
may help a country’s exports gain market share because the goods that priced when the currency
was strong will drop their price while the currency is weak. The increase in sales can help in the
economic growth and jobs, while increasing profits for companies conducting business in foreign
markets. Everybody wants to have the value of currency to be down to encourage exports and to
have stable competition. A strengthening U.S. dollar means that it now buys more of the other
currency than it did before (Momoh, 2019). A strong dollar benefits American consumers with
cheap imports and less expensive foreign travel or services. At the same time, American
companies that export or rely on global markets for the bulk of sale have been hurt.

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The Strength of Dollar All words have their certain meanings. For instance, “strong” and “weak” are usually considered opposite of each other, so one might think strong is good and weak is bad, in general meaning. But when it comes to the value of currency, it’s not that easy to understand. The term “strong” and “weak” are used to compare the value of currency (such as U.S. dollar) relative to another currency (such as the Euro). The words such as strong and weak, rising and falling, appreciate and depreciate, inflation and deflation are relative terms in the world of foreign exchange. The U.S. dollar is not only used as a global currency but also as an exchange tool for currencies. A strong dollar means that the U.S. dollar has risen to a level that is near historically high exchange rates for the other currency relative to the dollar. On the other hand, weak dollar m ...
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