Since 2002, the dollar’s value relative to the other currencies in the world has diminished by about a third. While a weaker greenback is asset class supportive, stimulates exports, and helps to improve the rate of economic growth, too much currency devaluation may lead to increased inflationary pressures. Some economists believe the benefit of a falling dollar to American exporters goes only so far because the industry gets hurts in the long run. In addition, it is argued currency devaluation reduces the incentive, for manufacturers and exporters, to cut costs and become more efficient.
The following is a New York Timed graphic on the winners and losers of a declining greenback:
(click to enlarge)
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