Relative strength of the US dollar?

bee

Trying to form a better understanding of what a "relative" strong dollar means to investments and other dollar related dynamics.

Compared to other global currencies the US Dollar is out pacing most foreign currencies and remains the world's reserve currency. A strong dollar, in effect, makes it more expensive for these foreign currencies (exchanges) to settle. Many countries peg their currency to the US dollar. Isn't a strong dollar problematic for consumers, goods and services of these "dollar pegged currency" countries? Finally, with global deflationary pressures pushing commodity values down, doesn't a strong currency move the relative value of these settlements (money for "stuff") even further apart?

JohnChisum

The Philippines has between 2.2 to 3 million Overseas Foreign Workers. (OFW's). They work all over the globe in a variety of jobs and they are paid in USD. Most of their wages are sent back home to support the family. As the dollar strengthens, the exchange rate of the Philippine Peso become less. It is already a hot topic in the news here. The money repatriated back to the Philippines is a significant part of the GDP.

The economy here is showing signs of a slowdown since last fall. A hot real estate market is cooling off. Most of this is due to the strong dollar.

bee

Just listened to Jim Rickards who explains the impact of a strong dollar on the repayment of EM debt which is repaid in US dollars. The $7T of EM debt may have higher than normal defaults as a result a merely a higher debt burden from a strong dollar / weak local currency repayment dynamic.

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