Impact of Currency Appreciation on Export Competitiveness

In international economics, exchange rates play a crucial role in determining the relative value of currencies. An exchange rate indicates how much one currency is worth in relation to another. For instance, if the exchange rate between the US dollar (USD) and the Euro (EUR) is 1.2, it implies that 1 USD can be exchanged for 1.2 EUR.

Understanding how exchange rates are influenced by various factors is essential for analyzing international trade and investment decisions.

What does an appreciation of a country's currency typically mean for its export competitiveness?