I want to share with why the market hates a strong dollar, and what you really need to know about dollar movement…
How Dollar Plays into Stock Market
You need to understand how the dollar plays into the stock market.
The stock market has a lot of companies that deal business internationally. The U.S. dollar is typically used as a ‘safe haven’ or reserve currency for these international countries.
If their currency begins to go bad, they may stockpile more of our currency – they are always watching the U.S. dollar. Our currency is considered the ‘place to be’ and is very stable.
The U.S. dollar is used as a safe haven to companies that deal business internationally. As the stock market goes up in terms of a strong dollar, business becomes more expensive and business and pricing exchange become more difficult overseas.