What occurs if dollar depreciates?

We all know the dollar is the king of all currencies and also known as the universal currency. The major currency transactions depend on the dollar, especially during exports and imports to other countries. The investors also consider the dollar as a key currency for their investments.

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When the dollar declines exports will grow, manufacturing raises and the employment rate will improve. More foreigners will visit the country and therefore the economy will increase marginally. On the other hand, the imports will be sluggish and the consumer purchase will increase on U.S products than foreign products. This impacts a slight decline in the economy.

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Stock Markets and Treasury Bonds:

The stock markets bell clings up when the dollar depreciates. The reason behind this is the company’s production will increase as the demand for their product raises.

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The Treasury bond yields will rise when the dollar falls. This implies that the Fed has to take some steps to improve the economy.

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Gold and Oil:

The Gold and Oil prices are coined in dollars. So, when dollar tumbles down the gold shines and the oil spills in a higher note. But gold can rise even if the dollar rises which depends on the demand for gold.

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