Dollar heg good—cheap imports, high foreign business, preserves reserve currency status

Adam Hayes, "Strong Dollar: Advantages and Disadvantages," Investopedia, 6-08-2023, https://www.investopedia.com/articles/forex/051415/pros-cons-strong-dollar.asp-- 嘉玮

Imports Are Cheaper

Goods produced abroad and imported to the United States will be cheaper if the manufacturer's currency falls in value compared to the dollar. Luxury cars from Europe, such as Audi, Mercedes, BMW, Porsche, and Ferrari, would all fall in dollar price. For example, if a European luxury car costs €70,000 with an exchange rate of $1.35 per euro, it will cost $94,500. The same car selling for the same amount of euros would cost $78,400 if the exchange rate fell to $1.12 per euro.

If the dollar continues its strengthening trend, import prices will likely keep falling. In theory, this leaves U.S. consumers with more disposable income as long as all other economic factors remain the same. Assuming the same steady economic factors, U.S. companies that import raw materials from abroad will have a lower total cost of production and enjoy larger profit margins.

Multinationals That Do Business in the U.S. Benefit

Foreign companies that do a lot of business in the U.S. and their investors benefit from a strengthening dollar. Multinational corporations with large sales in the U.S., which earn income in dollars, will see gains in the dollar translate to gains on their income statements and balance sheets. Investors in these companies should be rewarded, as well.

Status As World Reserve Currency Is Bolstered

A strong dollar bolsters the dollar's status as a world reserve currency. While some countries, including Russia, Iran, and China, have questioned the status of the U.S. dollar as the de facto world reserve currency, a strong dollar helps keep its demand as a reserve high.