There is a misconception that when the national currency weakens in value against consumer goods, then the economy is weakening and that when the national currency is strengthening in value against consumer goods, then the economy is strengthening.
While many arguments can be made and different factors can help define the argument. For instance, we could say, "it depends".
Commonly speaking. Not taking external forces into consideration such as RMB vs dollar. But simply looking at it plainly, such as RMB vs TV set, when a currency strengthens in value it is often a sign of a weak economy and when the currency is weakening in value, its a sign of a strong economy.
When there is more paper currency, there is often more paper currency chasing after labor, goods, and services. Which often mean higher employment, higher spending, and higher inflation. As a result, wages increase and so do consumer prices. Economic growth is best idealized in this environment. This is why currencies tend to lose their value during economic booms.
When there is less paper currency, there is often less paper currency chasing after labor, goods, and services. Which often mean higher unemployment, lower spending, and deflation. As a result, wages decrease and so do consumer prices. Depressions are best idealized in this environment. This is why currencies tend to strengthen in value during economic depressions.
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