In the Nixon administration, Treasury Secretary John Connally famously declared that while the dollar is the United States’ currency, it becomes other countries’ problem. This sentiment still holds true today as a strong dollar is causing some challenges for economies abroad but not significantly affecting the US economy.
Currently, the Bloomberg Dollar Spot Index is near a five-month high, indicating significant gains against major currencies such as the South Korean won, Japanese yen, and Swiss franc in recent months. Finance ministers in South Korea and Japan have expressed concerns about this trend, but it is not causing widespread fear on a global scale.
Unlike previous episodes of dollar strength, the current situation does not pose a major threat to the US or global economy. The strong dollar may cause some minor disruptions abroad, but for the most part, the US economy remains unscathed by its effects.