Trade · 6 pages · 12 min
Inflation is a rise in domestic prices, while a weaker currency is a lower price in the foreign-exchange market.
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Inflation means that a unit of domestic money buys fewer goods at home as time passes. A weaker currency means that same unit buys fewer units of some foreign money, which is a price observed in the foreign-exchange market. The opening covers inflation is a domestic price rise, weakness is a foreign-exchange price, and a peg can separate the two.
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