Short answer
The dollar tends to be strong when US interest rates are higher than other countries' or when investors want a safe place to park money.
Why is the US dollar strong?
What happened
The US Dollar Index (DXY) — which tracks the dollar against a basket of major currencies — held near recent highs.
Why it happened
Higher US interest rates make dollar deposits more attractive, pulling money in from around the world. In uncertain times, investors also flee to the dollar as a 'safe haven', pushing it up further.
Why investors care
A strong dollar makes US exports more expensive, hurts multinational earnings, and puts pressure on gold, oil and emerging-market stocks.
How it affects ordinary people
US travellers get more for their money abroad. Non-US investors holding US stocks or ETFs get a currency tailwind, but imported goods in the US get slightly cheaper while US goods abroad get pricier.
FAQ
Is a strong dollar good or bad?
It depends who you are. Good for US importers and travellers, harder for US exporters and emerging markets with dollar debt.
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