Not really.

Currency appreciation or stability may indicate that there is a stable demand (or improvement)for the country's currency, which is a good projection of the country economy.

General indicator like GDP will tell us total production or income of a country in terms of monetary value

There are many indicators of currency value, GDP, external debt size, inflation rate ... etc

Currency strength comes from the financial industry only. The financial industry is backed by the Central Banks, that provide endless funding with low interest rates. The result are strong currencies in the EU, US, Japan and recently China, while economies with a strong real economy such as India, Iran, Turkey, Russia and Brazil suffer with their weak currencies

Currency value is no more an indication of value in some absolute sense as is any other internationally traded commodity for which a formal market institution exists. And is even less reliable as an indicator of the satisfaction of any life promoting economic activity which has resulted in the provision of a nett positive meaningful increase in the welfare of both countries conducting trade between them. The strength (size measured in its currency) of a country's economy, and the strength of that country's so-called 'strong' currency, is not an indicator that its economic activities are providing welfare for its population, and for that trade to equally benefit welfare perceptions in each of those countries with which it has traded.... except in the mythical case where those institutional markets operate as true 'free' markets in a classical sense, rather than under neo-classical, and especially as neo-liberal, tautological 'free market' conditions, as those dogmas define the relationship in their 'sacred scripts'. Let us not fool ourselves any more... any market which can be influenced by the activities of even one trader in it and in which all participants do not have equal capability to process all information pertinent to that market, and any that in its turn is affected by, and is able to access and assimilate equally all the information that is available...and that is all the information that exists, then the market is oligopolistic to at least some extent and is not a 'free' market at all. And so currency values, which are manipulated every minute by humans, and every milliseconds by algorithms, which are all operating in secret and where participants are not trading currencies for the purpose of gaining the utility of buying goods with the currency gained, or of being relieved of a surplus no longer needed, but are speculating upon the movements within the market to make money from money.. then currency value as an indicator of any useful attribute of the economies of the countries using them is an ephemera. To claim that it is, except within the confines of that temple a pert of whose creed it is and within the congregation of its believers, must be seen as being an intellectual fraud and as an inculcation necessary for the perpetuation of the intellectual comfort of its faithful. And of the individual wealth, expressed in the 'value' of the one master currency so defined, of its own priesthood. Rather than the perpetuation of the wellbeing of even its own congregants, let alone that of the populations of those countries with which they "trade". While arbiting that trade in terms of their own relative "supposed currency value". A relative value (which can never in these conditions ever be considered to represent any absolute) that is not determined by the physical trade that is actually taking place between them, but by a froth of largely speculative 'market' trades disguising purely manipulative ones designed to alter and maintain relative currency values in favour of those countries, 'strong' enough in currency terms and economic size, to conduct such trades. This permanent 'positive terms of trade' for the large players facilitates the permanent relatively low labour wage levels in less strong trading partners and hence the permanent exploitation of their labour by the 'stronger' countries. It also allows, through the price ratchet of sticky pricing common to all markets, the perpetuation of the illusion amongst the weak inside strong countries and inside weak countries that everybody is all the time benefiting from what is happening. This relies strongly on perpetuating the illusion that currency values represent, in some tangible way, an absolute measure of value of human effort and is effective in developing the individuals' wellbeing and that of their communities. The dogma under discussion can also be seen to rely upon the perpetuation of the very concept of 'countries' as defining independent economic domains. Without patriotism, and xenophobia its cousin, this 'currency value' based form of exploitation, and slavery some might argue, would not be possible. Equally the unboundedness of the concept of private ownership of anything and everything for which title can be invented is the second and equally vital pillar of the same temple. But that discussion is for another day...

If the strength of relationship is measured by the sign of correlation coefficient (+/-), the relationship between currency value and the strength of the economy is questionable. The US and most other developed economies, such as the EU countries, have stronger currencies. There, we see positive relationship between strength of the currency and economy. However, in less developed or developing economies, such as India, China and the ASEAN countries, this relationship creates a mixed sentiment. Export-led growth, like China, wants to maintain its currency weak in order to remain competitive in the global market. Other less developed neighboring countries in the ASEAN with weak currencies have problem attracting foreign investment and cannot move out of the cheap labor market into the assemly or manufacturing market where stronger currency is needed for importing components to assemble and re-export. Thus, the relationship between currency and strength of economy depends on different stages of economic development and the country's development and economic priorities.

FOR EXAMPLE, the general argument asserts that weak currency is good for export. This is true for low tech and labor intensive industries, which are indicative of less developed economies. However, for a developing economies engaging in export processing of manufactured assemblies, weak currency hurts export because components for assemblies have to be imported. Stronger currency in this case would allow cheaper inputs and higher level of level of output for export.

Economic strength is a long-term determinant of currency strength. In the short-run, the currency is affected by many short-term volatile factors that may not be related to economic fundamentals like social unrest, political development, monetary and fiscal events.

The premise of this discussion is "Is the value of a country's currency the best indicator to its economic strength? Most developed cou[n]tries have strong economies."

I think we are , this year, better equipped perhaps than any time in history to question the question.

What is 'economic strength'. Is it 'resilience in providing a stable and broadly adequate assurance of the continuance of life and the living of it' or is it the transient power that the large size and high concentration of surplus productive value directed at disadvantaging the terms of trade and the conditions of resource access and supply of countries with less 'aggressively' directable resources? Covid-19 would seem to have identified that this is the true distinction in the 2 popular uses of the the term 'strong economy'. The answer must be one that reveals one's philosophical biases in the realm of ethics and morality, truth and justice. It will separate the truly humanitarian from the those who only give the principle lip-service so as to provide themselves with the 'moral space' to work for their own unbridled interests.

In my opinion, the value of a currency is not recognized as the best universal indicator of a country's economic strength, but it is one of many factors that are related to the economic development of a country or an economic region represented by a particular currency. If the scale of this relationship is large, then the change in the value of the currency may be treated as one of the key indicators of changes in the economic and financial situation of the economy. In the short term, a change in the value of a currency may also have significant economic and financial effects in certain sectors and sectors of the economy, for certain types of economic agents, etc. Usually, if the economy is developing effectively, the production potential of the economy grows, the economy gains an advantage over other economies in its development, develops faster than other economies, increases the scale of exports of highly processed products and services, increases the scale of equipping the economy with new technologies, modern production factors, a financial system with high financial capital, etc., then the currency of the country or economic region can and usually appreciates against other currencies.

Best wishes,

Dariusz Prokopowicz