The common disadvantage for a strong dollar is the expense foreign tourists would spend in the U.S. Because the goods and services would be expensive. Plus, the foreign tourists would also convert their local currency to the U.S. dollar. This is because their local currency is lower than the U.S. dollar. In accordance with this, business travelers or foreigners working in the U.S. would find that the U.S. dollar is too high for their cost of living. Business men holding foreign-denominated bank accounts living and working in the U.S. would also suffer from the costs gap.
A strong dollar indeed would make the importers get more benefit, but it will surely hurt the exporters. When imports are cheaper, the domestic produced goods would be expensive abroad. Exporters receive foreign currencies for their goods, so it would follow the foreign exchange rates. The epitome would be, the American-made car with the costs of $30.000 would be €22.222 in Europe. The exchange rate here would reach 1.35 dollars per euro. However, it would increase to €26.786 when the dollar is strong to 1.12 per euro. Analysts argued that the expensive exports could lead to more problems like American jobs costs.
The next impact would be U.S. companies conducting business overseas. A us-based companies having a business around the globe would hurt due to income from the foreign sales decreasing in value in their balance sheets. Investors also see more negative impacts than otherwise in this case. MCD and Philip Morris International Inc. for instance are U.S. businesses with a large overseas sales.
