3 ways a strong dollar impacts the global economy

3 ways a strong dollar impacts the global economy. JP Morgan believes the higher US Dollar is a positive force in the global economy and, in the long run, for global investors. A rising dollar is cutting import prices, which should help hold inflation in check. Over the past year, while the dollar index has risen by 7.2%, WTI crude oil prices have fallen by 16.8%. By feeding through to lower gasoline prices, this boosts the real disposable income of the average American household, a long-overdue bonus in what has been a very unequal economic recovery. The reduced inflation pressure from a rising dollar may allow the Fed to start (raising rates) later and raise rates more slowly than would have otherwise been the case. Most importantly, however, a higher dollar effectively transfers demand from the U.S. economy to economies around the world. At this stage of the global business cycle, this is a welcome development. (VIEW LINK)


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