How can the dollar be worth more relative to the Euro and some other currencies, but inflation (where the dollar is worth less for the American Consumer) still be happening at such high rates consecutively?

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How can the dollar be worth more relative to the Euro and some other currencies, but inflation (where the dollar is worth less for the American Consumer) still be happening at such high rates consecutively?

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4 Answers

Anonymous 0 Comments

If both currencies are experiencing inflation they can simultaneously lose value domestically and shift the relative exchange rates.

Many of the forces causing inflation in the US are also present in European economies, and so their currency is also devaluing both domestically and relative to the also-devaluing dollar.

Just be glad you’re not getting paid in Turkish Lira.

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