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As noted earlier, a change in the exchange rate can, in the short run, affect the demand for and supply of commodities, and the competitiveness of US agriculture. When the US dollar strengthens or gains in value, it causes importers to pay more for the US dollar to buy US commodities.
Currency exchange rates affect travel, exports, imports and the economy. In this article, we'll discuss the nature of currency exchange and its effect on people and the economy. Before delving into the topic in more detail, we must first establish a constant; for demonstration purposes we will be talking about the relationship between the euro and the U.S. dollar.