The Direct Impact Of a Stronger Us Dollar

The direct impact of a stronger dollar
The appreciation of the dollar has resolved a number of economic difficulties for non-US countries. By appreciating, the pressure on the US to service its debts has increased, and creditor countries around the world have benefited.


1, It eases the attack on the Eurozone and other non-US countries. The United States has always maintained itself at the center of the "one super class", i.e. the "one super class". Therefore, for countries or economies that have the ability to compete with him, they will certainly carry out the necessary attacks. In recent years, because of the rapid rise of the euro, the US government and investment banks have put on a political show, with the ultimate goal of crushing the euro and reducing the number of economies that can compete with it. If the dollar embarked on the path of appreciation, the appreciation pressure on the euro will be eased in the outside world, will also increase the exports of the eurozone countries, which in turn will pull the economic growth of the eurozone countries and promote the development of production and processing enterprises.

2, To alleviate the pressure of appreciation of commodity currencies led by the Australian dollar. With the devaluation of the US dollar, the prices of all US dollar-denominated commodities rose sharply, even affecting all commodities. Inflationary pressures increased steeply. The currencies of countries such as Australia and Canada also accelerate upwards, ultimately hitting and shaking the economies of these countries hard. Accordingly, it also raises the cost of exports from resource countries and continues to drive up the price of commodity raw materials. This vicious circle will continue until the economy collapses, and finally only a reshuffle will end the cascade of negative effects.

3, It gives hope to emerging market countries. The emerging market countries are mainly the BRIC countries, led by Brazil, Russia, China and India, as well as most developing countries in Africa and Latin America. The financial crisis, which began in the United States and was exacerbated in the United Kingdom, was triggered by an economic crisis in developed countries in Europe and the United States. In the past, it was these developed countries that exploited and suppressed the economic growth of developing countries, but it is widely believed by the world's major institutions that it is the emerging market countries such as the BRICs that will be able to rescue the developed Western countries this time.

The main reason is that these countries have large foreign exchange reserves, which can ease the financial pressure. This is reflected in the fact that the World Monetary Fund has reduced the number of seats for countries such as Europe and the United States and given them to emerging market countries instead.

Secondly, the BRIC countries have a large number of human and mineral resources. For the next step of economic recovery, these material and human resources are very valuable assets.

Thirdly, the emerging market countries have a large number of consumer markets, which is an important factor for economic recovery. The vast market is able to solve the problem of consumption of goods and the smooth flow of production, distribution and reinvestment links.
It is therefore said that the emerging market countries are the hope for this crisis.

However, the exports of these countries have been severely damaged by the frenzied devaluation of the dollar. The export sector has taken a huge hit. At the same time, the currencies of these countries have appreciated, causing massive capital inflows and increased inflation, which has severely hit the living standards of their citizens.


This coincided with the appreciation of the US dollar, which gave developing countries the opportunity to do just that. The country's currency can be devalued and exports can increase, boosting the country's export sector, increasing employment and foreign exchange reserves, which in turn will increase people's income and raise consumption levels. It will also put pressure on "hot money" to withdraw from developing countries, without affecting the stock markets and economic development of such countries.