What is a Weak Dollar?
Economists say the dollar is weak when it becomes less valuable than other currencies. I can remember a time when one US dollar (USD) was worth about 1.25 Canadian dollars (Looney’s). As I write this, $1 USD = 0.98 Looney (current exchange rates). If something were priced in Looney’s at $100 you could expect to pay about $102 USD today but it only cost about $80 USD before. Now let’s put some perspective on a weak dollar. If you are planning on traveling overseas or buying foreign products, then a weak dollar is bad news. It will take more USD’s to buy the things you want. But the weak dollar is good for US businesses who have customers and clients overseas since the overseas currencies can buy more goods and services. Tourism to US locations with international appeal such as Disneyland and Hawaii should benefit from growth in international tourism. I could even argue that growth for domestic businesses eventually benefits Americans as a whole since some of them have purchased investme
Sometimes referred to as a falling or declining dollar, the weak dollar is a comparative situation in which the relative strength of the currency of a country is decreased in comparison to the currency of a different country. A number of factors can contribute to the creation of a weak dollar, including political, economic, and social factors. However, a weak dollar may or may not be a bad situation for the overall economy of the country. Many people believe that the concept of a strong dollar is the only preferable status for the performance of domestic currency against foreign currency. However, that is not necessarily the case. A weak dollar can have a very positive impact on certain factors of a national economy when the status exists for only a short time. The weak dollar creates a situation where products produced by the company become more cost effective for consumers in other countries where their native currency is strong. A rise in the exports from a country helps the economy
