A depreciation of the U.S dollar rise the price of U.S. imports, and fall in the price of U.S exports.
In a floating exchange rate system, currency depreciation refers to the decline in value of a nation's currency in relation to one or more foreign reference currencies.
Currency depreciation can happen for a variety of causes, including weak economic fundamentals, interest rate differences, political unrest, investor risk aversion, etc.
The exchange rate affects whether there is a trade surplus or deficit; a depreciated domestic currency encourages exports and raises the cost of imports. A strong native currency, on the other hand, makes imports more affordable and hinders exports.
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