Nicole Lappin

When you think about the value of the dollar, you're talking about how it stacks up against other currencies in the global market. So think one US dollar getting you few euro or yen. Inflation, on the other hand, measures how much more expensive goods and services are within the US economy itself.

When you think about the value of the dollar, you're talking about how it stacks up against other currencies in the global market. So think one US dollar getting you few euro or yen. Inflation, on the other hand, measures how much more expensive goods and services are within the US economy itself.

When the dollar weakens internationally, it can also contribute to inflation domestically because imported goods then become more expensive. But inflation can also rise for unrelated reasons to the dollar, like supply chain disruptions or rising wages or, I don't know, a pandemic.

When the dollar weakens internationally, it can also contribute to inflation domestically because imported goods then become more expensive. But inflation can also rise for unrelated reasons to the dollar, like supply chain disruptions or rising wages or, I don't know, a pandemic.

When the dollar weakens internationally, it can also contribute to inflation domestically because imported goods then become more expensive. But inflation can also rise for unrelated reasons to the dollar, like supply chain disruptions or rising wages or, I don't know, a pandemic.

So net-net, a falling dollar affects what your money is worth abroad, while inflation affects what your money can buy at home. But to really unpack what would need to happen in order for the value of the dollar to rise, we need to talk about how the dollar gets valued in the first place. The U.S. dollar is a fiat currency, which means that it's not backed by gold or any physical commodity.

So net-net, a falling dollar affects what your money is worth abroad, while inflation affects what your money can buy at home. But to really unpack what would need to happen in order for the value of the dollar to rise, we need to talk about how the dollar gets valued in the first place. The U.S. dollar is a fiat currency, which means that it's not backed by gold or any physical commodity.

So net-net, a falling dollar affects what your money is worth abroad, while inflation affects what your money can buy at home. But to really unpack what would need to happen in order for the value of the dollar to rise, we need to talk about how the dollar gets valued in the first place. The U.S. dollar is a fiat currency, which means that it's not backed by gold or any physical commodity.

Its value comes from the fact that the US government says it has value and the global economy agrees. But the market is what really sets the price. The dollar's value is driven by supply and demand, just like anything else in a capitalist economy. There are five big levers that affect the supply and the demand of the dollar. First, a hot topic right now, interest rates.

Its value comes from the fact that the US government says it has value and the global economy agrees. But the market is what really sets the price. The dollar's value is driven by supply and demand, just like anything else in a capitalist economy. There are five big levers that affect the supply and the demand of the dollar. First, a hot topic right now, interest rates.

Its value comes from the fact that the US government says it has value and the global economy agrees. But the market is what really sets the price. The dollar's value is driven by supply and demand, just like anything else in a capitalist economy. There are five big levers that affect the supply and the demand of the dollar. First, a hot topic right now, interest rates.

When US interest rates are high, foreign investors want to bring their money back to the United States to get those better returns. That increases demand for the dollar and it pushes up the dollar's value. When rates are low, though, there is less demand and a weaker dollar. The second thing is inflation.

When US interest rates are high, foreign investors want to bring their money back to the United States to get those better returns. That increases demand for the dollar and it pushes up the dollar's value. When rates are low, though, there is less demand and a weaker dollar. The second thing is inflation.

When US interest rates are high, foreign investors want to bring their money back to the United States to get those better returns. That increases demand for the dollar and it pushes up the dollar's value. When rates are low, though, there is less demand and a weaker dollar. The second thing is inflation.

High inflation makes the dollar less valuable at home and abroad because it erodes purchasing power. Number three, economic performance. A stronger US economy with solid growth and low unemployment tends to attract foreign capital, which then boosts the dollar. Number four, market sentiment. This one is more psychological, but it's just as important.

High inflation makes the dollar less valuable at home and abroad because it erodes purchasing power. Number three, economic performance. A stronger US economy with solid growth and low unemployment tends to attract foreign capital, which then boosts the dollar. Number four, market sentiment. This one is more psychological, but it's just as important.

High inflation makes the dollar less valuable at home and abroad because it erodes purchasing power. Number three, economic performance. A stronger US economy with solid growth and low unemployment tends to attract foreign capital, which then boosts the dollar. Number four, market sentiment. This one is more psychological, but it's just as important.

If investors think the US economy is headed for trouble, they're probably going to pull their money out. So less demand for the dollar means lower value. And number five, trade policy and geopolitics. Tariffs, sanctions, other government policies can spook or attract, depending on what they are, investors. Uncertainty, though, is a killer for the U.S. dollar. So you do the math.

If investors think the US economy is headed for trouble, they're probably going to pull their money out. So less demand for the dollar means lower value. And number five, trade policy and geopolitics. Tariffs, sanctions, other government policies can spook or attract, depending on what they are, investors. Uncertainty, though, is a killer for the U.S. dollar. So you do the math.

If investors think the US economy is headed for trouble, they're probably going to pull their money out. So less demand for the dollar means lower value. And number five, trade policy and geopolitics. Tariffs, sanctions, other government policies can spook or attract, depending on what they are, investors. Uncertainty, though, is a killer for the U.S. dollar. So you do the math.