Who’s Afraid of the Rising Dollar? Not the Thriving U.S. Economy
(Bloomberg) -- Don’t believe everything you hear about the corrosive effect a more expensive dollar has on corporate America. U.S. businesses and the world’s largest economy can handle the greenback’s strength just fine.
Companies in the Standard & Poor’s 500 Index, from drugmaker Pfizer Inc. to Microsoft Corp., Procter & Gamble Co. and Royal Caribbean Cruises Ltd. have blamed the strongest dollar in more than a decade for crimping profits in 2014, or indicated it will hurt them this year.
The bigger picture is hardly so dire. Viewed as a whole, American business is much less vulnerable to the dollar’s rise than are the U.S.-based multinational giants. The exchange rate poses an even smaller threat to U.S. economic growth, which wrapped up its best year since 2010. While a strong dollar may weaken exports, it also means cheaper oil, less costly goods from overseas and continued low inflation -- all good things for an economy that’s powered by consumer spending.
“There’s going to be some pain for large corporations, but broadly speaking, the increase in the dollar is something the U.S. economy is able to absorb,” said Michelle Meyer, senior U.S. economist at Bank of America Corp. in New York.
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http://www.bloomberg.com/news/articles/2015-02-12/who-s-afraid-of-the-rising-dollar-not-the-thriving-u-s-economy
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