Inflation is the supply/demand relationship between a given currency and the things you can buy with said currency (financial assets like stocks are weird becau

Inflation is the supply/demand relationship between a given currency and the things you can buy with said currency (financial assets like stocks are weird because they are valued based on future cash flows which causes some weird recursive effects) The US is experiencing inflation because, across a number of categories, there is not enough supply of goods and services to match demand. This is due to things like “we built hotels for normal business travelers but now we have digital nomads” and “we are not really utilizing public transit anymore so more people want cars” etc. Other countries are facing the same problems but worse (partly due to the war in Ukraine, among other idiosyncrasies) so the dollar becomes stronger relative to those currencies. Keep in mind, the value of a currency in forex is usually “I need to buy a Euro because I want to buy something from someone who only accepts Euro.” So a factory shutting down in Germany (in a round about way) makes the Euro less valuable.