What does the Dollar do for you?

What Does the Dollar Do For You?
During the past several months, the weaker value of the U.S. dollar has been headline news. But if you keep track of headlines, you might also recall that about five years ago, there was a considerable outcry about the dollar’s unprecedented strength.So which is preferable, a strong dollar or a weak one? Actually, there are benefits to both sides of a fluctuating currency. What matters most is how you react to changing conditions.Isn’t a Dollar Just a Dollar?If the dollar were the world’s lone currency, there would be no such thing as dollar weakness or strength. Here at home, the dollar serves primarily as a unit of account and a store of value. In dollar-denominated transactions, the dollar’s purchasing power is a matter of agreement between spenders and sellers.However, when two parties using different currencies want to transact business, the exchange rate between the two currencies may affect the price of the transaction.The Strengths of WeaknessA weak dollar isn’t necessarily bad news for the stock market or the economy. U.S. manufacturers tend to applaud a weaker dollar because it makes U.S. made products more competitive in foreign markets and increases foreign... Read the rest at...

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Joe Swanson, CRPS
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