How a weak dollar impacts your pocketbook

Editor's note: This is a transcript of the audio file.

How does a weak dollar affect your bottom line? I'm Kristin Arnold with your Bankrate.com Personal Finances Minute.

A weak dollar isn't all doom and gloom. In fact, it can help the U.S. export business by making our goods cheaper and more attractive to international markets. The more products exported can result in better business…possibly boosting the economy.

However, when the dollar is weak, the relative price of global commodities goes up – which impacts consumer prices for food and energy…such as gasoline. It becomes more expensive for U.S. manufacturers to produce anything. Greg McBride, Senior Financial Analyst, with Bankrate.com explains.

"The weakness of the U.S. dollar has a pocketbook affect on American households by driving up the cost of food, gasoline and foreign travel."

The dollar's value also plays a role in our investments.

"A weak dollar boosts returns on many of our international investments when they're converted back into U.S. dollars."

Tomorrow, we'll discuss what a strong dollar means for consumers. For Bankrate.com, I'm Kristin Arnold.