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strong US dollar can affect everyone: The US dollar is getting stronger, what is its effect?

The US dollar has been rising for more than a year against everything from the British pound across the Atlantic to the South Korean won across the Pacific. After rebounding on Friday, the dollar is near its highest level in more than two decades against six major currencies, including the euro and the Japanese yen. Many professional investors do not expect the dollar to fall anytime soon. Almost everyone has been affected by this rise in the dollar. Even those who never cross the US border. What causes the US dollar to rise and what could be its impact?

What does it mean to say the dollar is strong?
A dollar costs more than ever to buy another currency. Take the Japanese yen. A year ago, one US dollar was worth 110 yen. Now available for 143 yen. Which means, about 30% increase in comparison. Foreign currency is now being transferred around the world for various reasons including banks, business. The US dollar has gained an average of more than 14% this year against the euro, yen and other major currencies.

Why is the dollar rising?
Because the US economy is doing better than others. Although inflation is high, the US job market remains remarkably tight. Other sectors of the economy – such as services – have improved. The housing industry has picked up momentum. Other problems in the economy have also eased. In this situation, traders believe that the Federal Reserve will raise interest rates to reduce inflation. It also increases the amount of money saved in the US treasury.

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Will the dollar increase the benefit of US tourists?
of course US travelers to Tokyo will spend 23% less dollars on dinner than before. With the dollar appreciating faster this year than everything from the Argentine peso to the Egyptian pound or the South Korean won, U.S. tourists to those countries are likely to increase as well.

Will it only help the rich?
no A stronger dollar will also reduce import costs for US buyers. They can import more. The dollar is also rising against the euro. In addition, ordinary US citizens can now hold more euros, including other foreign currencies, than ever before. Ordinary, US citizens will also be able to shop everyday at lower prices than ever before.

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