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Here’s what can happen when the US dollar frails.

From the vantage point of American exporters, if the currency declines, these businesses can increase their selling prices (denominated in the US dollar). Same thing with overseas prices. Higher prices mean higher earnings.

For instance, Company XYZ is an American manufacturer with operations in the United Kingdom. The firm’s profits from that country will be denominated in the British pound. If sterling is firmer than the greenback and all the earnings are converted versus a lower dollar, it will translate to more dollars for the US manufacturer. Shareholders love better profit margins.

Speaking of shareholders, those who venture in American multinational entities benefit from slumping greenback as well because they gain when the greenback slides. For example, Company ABC is a fast food restaurant with operations in Japan. The entity noticed more and more diners are heading to their stores daily. The yen devitalized versus the US dollar, too. Hence, the fast food chain and its investors are cashing in on that scenario.

Even though investors gain from capital appreciation in case of declining dollar, it is difficult to assimilate whether the additional revenues are tantamount to greater dividend payments for investors.

Shareholders also earn from acquisitions if the greenback weakens. Let’s presume Italy-based Company X acquired US-based Company Y for $200 billion in 2010. At that time, the euro was much firmer that the dollar. Hence, Company X saved a lot of money for that acquisition.

Uncle Sam will be pleased with this development at one point, especially if the dollar remains weaker for quite a long time. If US companies keep on acquiring companies or assets abroad, they will be obliged to pay more taxes. More taxes mean more money for America. The firms won’t love it, though.

Conversely, if the US dollar weakens for a prolonged time, it may devitalize US consumers’ purchasing power. It can lead them to purchasing generic brands than branded ones. It can also affect trade with countries with strengthening currencies.