Posted on Sep 27, 2022
Is a strong dollar a good thing? Not for everybody
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https://www.npr.org/2022/09/27/ [login to see] /strong-dollar-euro-pound-foreign-exchange-fx-inflation
The value of the U.S. dollar is surging at a moment when there are few clear bright spots in the American economy.
It's now the strongest it has been in two decades, and it's poised to get even stronger. The new power of the greenback is roiling economies and markets around the globe, and creating winners and losers.
Early Monday, the British pound reached a record low against the dollar after the United Kingdom's new finance minister announced a package of tax cuts meant to stimulate the country's economy.
Never before in history has the U.S. dollar's value been so close to the pound, and the news generated a sense of emergency for the U.K. central bank. Bank of England Governor Andrew Bailey put out a statement intended to reassure the country, saying the bank "is monitoring developments in financial markets very closely."
The value of the U.S. dollar is surging at a moment when there are few clear bright spots in the American economy.
It's now the strongest it has been in two decades, and it's poised to get even stronger. The new power of the greenback is roiling economies and markets around the globe, and creating winners and losers.
Early Monday, the British pound reached a record low against the dollar after the United Kingdom's new finance minister announced a package of tax cuts meant to stimulate the country's economy.
Never before in history has the U.S. dollar's value been so close to the pound, and the news generated a sense of emergency for the U.K. central bank. Bank of England Governor Andrew Bailey put out a statement intended to reassure the country, saying the bank "is monitoring developments in financial markets very closely."
Is a strong dollar a good thing? Not for everybody
Posted from npr.org
Economics
Finance
United Kingdom
Posted >1 y ago
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PO1 William "Chip" Nagel
..."The winners
U.S. importers
For companies that buy goods from overseas, purchases are less expensive.
"For importers, it's a positive story," says Jordan Rochester, a senior foreign exchange strategist at Nomura Securities. "For anyone importing from the likes of China, importing raw metals and energy from abroad, that's going to be positive for you — as long as it's not priced in dollars, of course."
On top of that, having a strong dollar mutes the effects of inflation.
U.S. travelers
For the first time in two decades, the dollar and the euro achieved "parity," meaning one dollar is worth as much as one euro, and the two currencies are still pretty close to even.
So, U.S. travelers can get better deals on hotel rooms and meals out when they travel to Europe, or anywhere else right now. For them, it's like the world is on sale."...
..."The winners
U.S. importers
For companies that buy goods from overseas, purchases are less expensive.
"For importers, it's a positive story," says Jordan Rochester, a senior foreign exchange strategist at Nomura Securities. "For anyone importing from the likes of China, importing raw metals and energy from abroad, that's going to be positive for you — as long as it's not priced in dollars, of course."
On top of that, having a strong dollar mutes the effects of inflation.
U.S. travelers
For the first time in two decades, the dollar and the euro achieved "parity," meaning one dollar is worth as much as one euro, and the two currencies are still pretty close to even.
So, U.S. travelers can get better deals on hotel rooms and meals out when they travel to Europe, or anywhere else right now. For them, it's like the world is on sale."...
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