What does the term a "Weak US Dollar" actually mean?

Question

I've heard the term used over and over again in the past few months to describe the situation in the US.

I know a weak US dollar implies a weak economy, but I'd like to know exactly what the term means, and how it is possible for a dollar to be "weak".

What causes this? If someone could explain I would be very grateful.

Answer 1

What most AmeriKans don't know and/or understand is, the U.S. Dollar is a COMMODITY... just like corn or beans or soy or sow bellies... And as a commodity... it is ONLY worth what someone is WILLING TO PAY FOR IT... that is how the currency markets work... the Dollar is bought and sold on the international currency market, which is just another type of COMMODITY market.

One of the market movers is, interest rates... when interest rates go down, the dollar is worth less to investors than when interest rates go up... There are any number of reasons the dollar goes down in value.. but just remember... it is  COMMODITY and it's value is RELATIVE compared to other world's currencies.

Answer 2

A weak dollar is worth less compared to other currencies.  It happens when persistently more money is printed by the government than is destroyed by the government.  If a country has more dollars floating around, all those dollars will therefore be worth less.  The government does this in order to lower interest rates and briefly stimulate the economy.

Answer 3

It simply means that, compared to other major currencies (like the European Euro, Japanese Yen, and a few others), the US Dollar is worth less. While this is good for people outside of the US who want things from inside the US, it is bad for Americans that want to buy things from outside of the country.

It basically means that, over time, prices of products in the US have all risen (very much caused by the rising gas prices and Americans strong need for oil), along with salaries. This means that everyone makes more money, but everything costs more. It doesn't mean much for someone who relies entirely on products designed and manufactured solely in the US, but nearly every product you see in your daily life has parts designed or manufactured outside the US.

Thus, because the US dollar is worth less than most other currencies, it is considered "weak".

Answer 4

This means the dollar is not as valuable as it used to be compared to other foreign currencies. For example, If a dollar is equal to 1 euro, and then later is equal to half a euro, the dollar is getting weaker. The economic term for this is depreciation.