Question

Suppose that a Swiss watchmaker imports watch components from Sweden and exports watches to the United States. Also suppose the dollar depreciates, and the Swedish Krona appreciates, relative to the Swiss Franc. In this case, the Swiss watchmaker would be:

Answer 1

In this case, the depreciation of the US dollar will make the Swiss watches more expensive for American customers, which will probably lower their demand.

The Swedish krona appreciation will increase the production costs of the watches, so the company will suffer twice, its sales will lower and its costs will increase.