The dollar improves in strength, and that makes US currency holders happy. However, when that happens, the commodities dominated by US currency become more expensive for those who trade in foreign currencies. So how do they feel about the stronger dollar and its impact on their business dealings?
Likewise, the stronger dollar means greater interest in investments in the US, meaning areas like US government bonds see greater influx of foreign investments. This also draws money out of markets that already may be struggling, like Europe and Japan, which may see another recession. Likewise, Russia is hurting because of the decrease in oil prices.
While it is possible that US investors may opt to spread their stronger dollars among cheaper, weaker stocks in foreign markets, the logical and smarter decision is to make those investments closer to home since the dollar is stronger. Therefore, markets that were already on the downward spiral are not going to get help from the dollar when it is showing improvement.
Some companies that import materials from other countries will see a profit boost when they get more for their money due to the strengthening dollar. If they do not pass on the profit to customers, that is.
Due to the strengthening dollar, companies that do more business abroad than within the US could have trouble with customers that opt for cheaper competitors or with discounts occurring once the transaction is changed from that country’s currency to the dollar. Both of these are not beneficial, despite the fact of the improved dollar status.