Chapter 6. Food Appreciation and Dollar Depreciation

Currency exchange rates affect the prices of everything from cars to corn. When the U.S. dollar gets stronger against other currencies, it reduces the dollar price of items the United States imports from other countries. For goods the United States exports, a stronger dollar makes U.S. products more expensive in terms of foreign currency.

Most types of food are traded in international markets, so currency exchange rates are an important factor affecting food prices. When the dollar weakens or strengthens against other currencies, food prices are likely to respond. Thus, the next rule of thumb: Food prices measured in dollars increase when the dollar weakens against other currencies and decrease ...

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