Weak Dollar

When the dollar stops hitting the gym, it turns all noodly and weak.

A weak dollar is when the U.S. dollar’s value is worth less and less relative to the other currencies around the world. Also like hitting the gym (or not), the term “weak dollar” applies when the dollar is weak for a period of time, not a short blip like a day or two.

Which means that the U.S. dollar has less buying power than before, and that turning in U.S. dollars for foreign cash will result in you getting less cash than before, since it’s not worth as much.

The dollar can get weak for lots of complicated reasons, economically and politically. Whatever the case, the Federal Reserve (a.k.a. “the Fed”) might step in to try to remedy the situation, like a currency Superman. For instance, they can raise interest rates, which would attract investors like bees to honey because of the prospect of higher yields.

See: The Fed. See: Exchange Rate. See: Bretton Woods.