What does it mean to say that the dollar is depreciating with respect to the euro?

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What does it mean to say that the dollar is depreciating with respect to the euro?

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What does it mean to say that the dollar is depreciating with respect to the euro?

Explanation & AnswerSolution by a verified expert

Explanation

A loss in the value of currency with respect to one or more foreign currencies is known as currency depreciation. It is affected by the demand and supply forces of currency and hence changes the exchange rates. "Dollar is depreciating with respect to the euro" means the value of the dollar has weakened in comparison to the euro. In simple terms, more units of dollars can be purchased by one unit of euro, as before depreciation.

Verified Answer

 "Dollar is depreciating with respect to the euro" means the value of the dollar has decreased with respect to the euro.

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