Use the supply and demand of United States dollars to fully explain a situation that would cause the American dollar to depreciate.

The increase in supply leads to depreciation while the increase in demand leads to appreciation.

If an American demand another currency, he/she needs to supply his/her own currency.

Example: In a situation, whereby an American wants to buy German products, he/she will supply dollars to pay for euros. In this scenario, the euro appreciates because there's increase in its demand, while dollar depreciates because there is increase in its supply.