The Dollar in the Eighties

Since mid-1980, the dollar has experienced an unprecedented appreciation in foreign-exchange markets. On a trade-weighted basis, the dollar appreciated 77 percent from its low in mid- 1980 to its most recent peak in February 1985. The sharp appreciation of the dollar put U.S. trade-related industries at a competitive disadvantage in world markets and contributed to the record $107 billion trade deficit in 1984. The dollar has since depreciated by approximately 11 percent, but remains high.