How does the price of the dollar affect the economy of foreign countries?

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How does the price of the dollar affect the economy of foreign countries?

In: Economics

4 Answers

Anonymous 0 Comments

If the exchange rate is high, that helps companies domestically as that makes foreign imports more expensive to bring into the country, and makes your products easier to export as they will be cheaper in foreign countries

If the reverse happens and the exchange rate goes low, then it has the reverse effect, foreign products become cheaper than domestic products, and it becomes harder to export your stuff to other countries.

So countries can manipulate the exchange rate to purposely boost their exports, China has been doing this for years. China exports trillions every year and imports only millions.

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