What describes a decrease in the value of currency in relation to foreign currencies?

A decrease in the value of currency in relation to foreign currencies is referred to as depreciation. This occurs when a country's currency loses purchasing power compared to other currencies, meaning that more of its currency is required to purchase the same amount of foreign currency. This can have significant implications for international trade, as it makes imports more expensive and exports cheaper on the global market.

Appreciation, on the other hand, refers to an increase in the value of currency. Inflation deals with the overall increase in prices within an economy, which can affect currency value indirectly but is not specifically about relative currency value. Deflation refers to a decrease in the general price level of goods and services, which can also impact the economy, but not specifically the value of currency in relation to others. This clarity helps to understand why depreciation is the appropriate term to describe the situation outlined in the question.