As the US dollar depreciates, domestic goods become cheaper and imported goods become more expensive, so domestic and foreign consumers will buy more US produced goods.
If the dollar appreciates the exchange rate rises, the relative price of domestic goods and services rises while the relative price of foreign goods and services falls. the change in relative prices will decrease US exports and increase its imports. a large number of factors influence the value of the coin. Whether the US dollar depreciates relative to another currency depends on both nations monetary policies, trade balances, inflation rates, investor confidence, political stability, and the status of the reserve currency. the direct effect of an exchange rate depreciation is to increase the price of imports relative to exports, which will tend to decrease the value of net exports exports minus imports and increase the current account deficit.
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