Strong dollar policy is United States economic policy based on the assumption that a "strong" exchange rate of the United States dollar (meaning it takes fewer dollars to purchase the same amount of another currency) is in the interests of the United States. In 1971, Treasury Secretary John Connally famously remarked how the US dollar was "our currency, but your problem,"[1] referring to how the US dollar was managed primarily for the US' interests despite it being the currency primarily used in global trade and global finance. A strong dollar is recognized to have many benefits but also potential downsides. Domestically in the US, the policy keeps inflation low, encourages foreign investment, and maintains the currency's role in the global financial system.[2][3] Globally, a strong dollar is thought to be harmful for the rest of the world.[4] In financial markets, the strength of the dollar is measured in the "DXY Index" (sometimes named the "USDX index"), an index which measures the exchange rate of the dollar relative to other major currencies.[5][6]
- ^ Atkins, Rory (2023-09-06). "The dollar is our currency, but it's your problem". EIU Corporate Network. Retrieved 2024-04-02.
- ^ Twaronite, Lisa (29 January 2008). "Strong dollar policy is useful fairy tale for U.S." Marketwatch. Retrieved 23 August 2011.
- ^ "Strong Dollar: Advantages and Disadvantages". Investopedia. Retrieved 2024-04-02.
- ^ "Global Repercussions of the Strong Dollar | Econofact". econofact.org. 2022-10-20. Retrieved 2024-04-02.
- ^ "What Is the U.S. Dollar Index (USDX) and How to Trade It". Investopedia. Retrieved 2024-04-03.
- ^ "DXY | U.S. Dollar Index (DXY) Overview | MarketWatch". MarketWatch. Retrieved 2024-04-03.