While the dollar's recent surge might hamper U.S. exports by making them more expensive in foreign currency terms, it's supposed to help U.S. consumers by making imports cheaper in dollar terms.
But that's not really happening, Omair Sharif, a director at brokerage Newedge USA, tells
MarketWatch.
The dollar has soared against the euro, yen and some other currencies. But its gains have been much more muted against the currencies of China, Mexico, India, Vietnam and Israel. Yet those nations account for much of U.S. imports, Sharif notes.
The dollar index, which measures the greenback against six major currencies, has jumped 19 percent during the last seven months. None of the countries that account for most of our imports are included in the dollar index. An index the Federal Reserve calls its "other important trading partners" index has advanced only 7 percent.
Price declines for items like televisions and cell phones began before the dollar's big move, Sharif note. And recent decreases in clothing prices stem more from discounting than the dollar, he says.
But
John Tamny, political economy editor at Forbes, says the greenback's ascendancy is a good thing when looked at more broadly.
"For money to float in value at all is for it to be robbed of its basic purpose; the individuals who comprise any economy suffering money's uncertainty in countless ways seen and unseen," he writes.
The dollar's "collapse" from 2001 to 2011 caused plenty of economic pain, Tamny notes. "While the ultimate goal should once again be stability, the stronger dollar of late is undeniably good, and as history shows, great for far more U.S. businesses (big and small) than it's bad for."
Dollar devaluation deters investment in the United States, he writes.
© 2023 Newsmax Finance. All rights reserved.