The appreciation or depreciation of a currency will not cause the level of trade to increase or decrease. It may change the direction of the trade – in this case more Americans buying British goods and fewer Brits buying American goods, but the level of trade will not be affected by this.
If the dollar appreciates against the pound, that means that $1 will buy more British pounds than previously. This will make British goods comparatively cheaper for Americans and American goods comparatively more expensive for Brits. Therefore, Americans will buy more British goods because they need to spend fewer dollars to buy the British goods.
If the dollar appreciates against the pound, that means that $1 will buy more British pounds than previously. This will make British goods comparatively cheaper for Americans and American goods comparatively more expensive for Brits. Therefore, Americans will buy more British goods because they need to spend fewer dollars to buy the British goods.
If the dollar appreciates against the pound, that means that $1 will buy more British pounds than previously and ￡1 will buy fewer U.S. dollars than previously. This will make British goods comparatively cheaper for Americans and American goods comparatively more expensive for Brits. Therefore, there would be a decrease, not an increase, in British demand for American goods because a Brit needs more pounds to buy the American goods.
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