John Connally, the Nixon administration Treasury secretary, famously told a group of central bankers that “the dollar may be our currency, but it’s your problem.” That’s as true as ever, with the strong buck causing a few headaches abroad — but generally leaving the US economy unscathed.
Current conditions find the Bloomberg Dollar Spot Index hovering close to the highest in five months, after posting large gains in recent months against most major currencies, including the South Korean won, the Japanese yen and the Swiss franc. That prompted South Korea Finance Minister Choi Sang-mok and his Japanese counterpart Shunichi Suzuki last week to express “serious concerns.” But unlike episodes past, the latest bout of dollar strength isn’t generally something to fear on a US or global level.
