When the dollar is
weak against a foreign currency — it takes more dollars than usual to buy a unit of the foreign currency — it strengthens exporting entrepreneurs in a few ways.
Accelerated outflows might force China's central bank to push the yuan to appreciate more
strongly against foreign currencies, to encourage Chinese investors to keep their money in the country.
As the US dollar continues to
weaken against foreign currencies, when an exchange traded fund or closed end fund is holding foreign stocks, that currency provides a boost to returns in terms of US dollars.
Institutional investors such as banks, multinational corporations and central banks that need to
hedge against foreign currency value fluctuations also hire forex traders.
The trade - weighted U.S. dollar has appreciated 15 %
against foreign currencies since last summer, including a 20 % singular gain against the euro, which has made American - made goods more expensive for foreign buyers.
Alphabet's 26 % revenue gain would have been only 23 % if the dollar's value hadn't
risen against foreign currencies, meaning the $ 31.14 billion would have been only $ 30.07 billion, or slightly less than analysts had forecast.
Also suffering from the strength of the U.S.
dollar against foreign currencies, which contributed to Terex's reduction in sales, the company reduced its earnings expectations in September by about 10 %.
The foreign exchange market is mainly dealing with currency speculation, bet for or
against foreign currencies.