if the value of the dollar falls due to less demand from the foreign exchange market (and not due to excess supply from the Federal Reserve creating too much money) is the outcome still the same, i.e. higher prices?
The answer is it depends. As long as oil is posted in dollars (not adjusted for dollar devaluation) the supply of dollars does not impact oil prices. The big jump comes if OPEC moves to the Euro instead of the dollar, then the devaluation maps directly to inflation in the U.S. But since most of the OPEC nations rely on the U.S. to keep them in the weapons they need to maintain power, it is not likely that OPEC will do anything to anger the U.S. – more than they already have.
The easier part is regular foreigns exchange. It will take twice as many dollars to buy the same goods and service after the devaluation than it did before. Kateras Parabus (all else equal) then the cost of imported goods doubles in the U.S. and becomes 100% inflation. Also not likely, but any devaluation will fuel inflation.
