If you open your wallet and pull out a dollar bill, it doesn’t take long to see the numerical figure imprinted in each corner, on both sides: $1. Even though the dollars in your wallet have fixed values ($1, $5, and so on), currency is a relative means of exchange. In other words, a single US dollar might buy 20 Mexican Pesos or 7 Chinese Yuan today, but that might not hold true tomorrow. While many factors influence the strength of the world’s monies, sometimes nations actually want to devalue their currencies relative to others. And it can affect the economy (and your portfolio) in complex ways. We’ll break down currency devaluation, why it happens, and what it means for the economy and your investments. What Is Currency Devaluation? Currency devaluation is when a government intentionally reduces the value of its currency relative to others. In essence, it’s a way to make domestic products more appealing to the rest of the world, like a coffee shop lowering prices to attract more customers. The increased demand from other nations should, in theory, boost exports and balance