The Impact of a Strong U.S. Dollar

Over the past six months, the U.S. dollar has been strengthening relative to other currencies. But what does this mean? In this video, we'll look into how exchange rates impact tourism, imports, and exports by comparing the U.S. dollar to the Euro.

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[Alanisbusinessacademy]

Due to conditions in Europe, the U.S. Dollar has strengthened against the Euro. Learn about the impact of a strong U.S. Dollar in our latest video.

[Alanisbusinessacademy]

How does a strong U.S. Dollar affect demand for exports? Find out in our latest video:

[nmlyxjc]

you explanation is much better than any other text book

[Alanisbusinessacademy]

+Richard Sampson Unfortunately it isn't that simple and that makes a very big assumption. You're assuming that buyers will to pay higher costs due to exchange rates. We know based upon empirical data that generally consumers will demand less of a product as its price increases, which often forces businesses to lower their prices. Although the U.S. may benefit from being able to purchase the components needed to manufacturer certain goods, that does not mean they will be able to sell the finished good. If you look at earnings forecasts for publicly traded U.S. firms, many are predicting less than stellar results in part due to the strong dollar weighing on exports. 

[nzshareman]

Thank you very good 1st it ever made sense to me i can see why Bill gave you some bucks
Cheers

[sarahwilson]

How about now 2021? There is inflation and shortages in the food market can the dollar strengthened or silver and gold would go up?

[richardsampson]

Have you considered the point that in our globalized economy, inputs used in the production of goods and services can and usually does come from overseas as imports. So if the dollar strengthens against other currencies, it would make imported inputs cheaper so exporters aren't greatly affected as costs fall. Likewise if the dollar weakens, imported inputs become more expensive so while they may have a higher export price the higher import prices/costs counteract that benefit to a degree.  

[thestranger]

This still doesn't make sense to me, if our currency becomes stronger we can import more for a dollar and cut our export prices to reflect the money saved.


In other words how can this work if the currency isn't really "worth" any more or less its all relative


for example,


I buy 1 widget for 1 dollar and sell it for the equivalent of $1.24


then my currency appreciates 100%
now i can buy 2 widgets for $1 and sell each one for $0.62


Which evens out to 1.24 for every dollar.


So the only way it would work against us is if we were buying 2 for 1 and selling them for $1.24 each.


I have no problem with making money, but are you saying the only reason why this concept works is basically because we want to buy low and sell high?


so greed would hurt exports, not so much a strong currency.




I'd really like some help with this i'm so damn lost.

[tebikei]

Do you have facebook blog or group that i can follow?

[csbaca]

Here in the States my retirement income is at $6200. It sounds like alot, but everything is expensive. So, where we travel is always to places like Mexico, Costa Rica, Chile. We have GREAT luxury vacations for roughly $3, 000.

[soto]

Where do you find out the strength of the dollar, say I wanna trade the crude oil inventory, but if the dollar is strong I can’t trade oil even if it’s inventory is higher than forecasted right?

[jamesruscheinski]

do consumers look for stronger currencies to make purchases that cover inflation

[aligncars]

I don't get why if I spend $100 USD to get 86 Euros I'm getting a good deal. It seems like I'm losing $14 in that case. What am I missing?

[andrean]

Even the Swiss Franc strengthened recently... How does that affect the Swiss economy? Also will it affect the US / European economy? 

[jamesruscheinski]

stronger currencies have more purchasing power for domestic and export / import products; weaker currencies have less purchasing power for domestic and export / import products

[jamesruscheinski]

stronger dollar helps consumers overcome inflation

[thattimestampguy]

Strong Dollar
= Happy American Tourists, unhappy Unamerican Tourists

1:08 Floating exchange rate

stronger = I get more foreign money for the same $1 bill 💵
weaker = I get less foreign money for the same $1 bill

Importers want a stronger dollar
Exporters want a weaker dollar

[AYVYN]

Country A Prints 100 Dollars
Their $1 product costs 1/100 of money supply.

Country B Prints 200 Euros
The Same Product is €2 and 1/100 of money supply.

Country A implements a bad monetary policy that causes speculators to sell the dollar and deflate the currency.

Country A sells 2 items for $1 and gets €2

Economists: *PROFIT*