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Strong and Weak Currency

In: Business and Management

Submitted By juanzapatajr
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Advantages and disadvantages of strong and weak currency.

One of the factors that can impact the economy of every country, is having a strong or weak currency, For the U.S. having a strong dollar has many advantages and disadvantages, Exchange rates are typically the best indicators of the value of the U.S. dollar versus other countries currency.
Advantages of strong dollar: * Economy grows. * The buying power of American people increase. * Traveling outside the U.S. becomes cheaper when traveling to countries where the dollar is higher than the currency of the nation visited. * The possibilities for U.S. investors and companies to be successful and profitable on countries where their currency is weak versus the American dollar are very optimistic and risk of investment is low. * Companies on the U.S. can outsource accounting services, technical support, customer service support and other services that can cost up to 80% cheaper or 1/5th of American comparable workers. * Is the cheaper for our country to import finished products like electronics, foods, auto parts and building materials.
These are only a few advantages of having a strong currency, at the same time these are indicators that can lead the country to trade deficit our exports (dollars amount) can be less than our imports.
Another great example of strong dollar is the oil prices. Currently we are experiencing a drop on the oil barrel, as a consequence the price of gasoline has drop to prices not seen on recent years, and this is also a boost for the economy since people is spending less money at the pump having more disposable income to eat out, vacations, transportation, medical expenses and pay down debt and other basically necessities.
A strong dollar can produce a positive domino effect. People will have more money to spend leading businesses to hire more employees,…...

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