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Strong dollar policy
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{{Short description|United States economic policy}} [[File:US Dollar Index DXY.webp|thumb|400px|right| {{legend|#00A2FF|outline=#0076BA|US Dollar Index (DXY)}} {{legend-line|#F27200 solid 3px|[[United States dollar|USD]]/[[GBP]] [[exchange rate]]}} {{legend-line|#017100 solid 3px|USD/[[Canadian dollar]] exchange rate}} {{legend-line|#004D80 solid 3px|[[Euro|EUR]]/USD ([[multiplicative inverse|inverted]]) exchange rate}} {{legend-line|#BC002D solid 3px|USD/[[Japanese yen|JPY]] exchange rate}} {{legend-line|#FFCD00 solid 3px|USD/[[Swedish krona|SEK]] exchange rate}} {{legend-line|black solid 3px|USD/[[Swiss franc|CHF]] exchange rate}} ]] '''Strong dollar policy''' is [[Monetary policy of the United States|United States economic policy]] based on the assumption that a "strong" [[exchange rate]] of the [[United States dollar]] (meaning it takes fewer dollars to purchase the same amount of another currency) is in the interests of the [[United States]]. In 1971, [[United States Secretary of the Treasury|Treasury Secretary]] [[John Connally]] famously remarked how the US dollar was "our currency, but your problem,"<ref>{{Cite web |last=Atkins |first=Rory |date=2023-09-06 |title=The dollar is our currency, but itβs your problem |url=https://corporatenetwork.com/the-dollar-is-our-currency-but-its-your-problem/ |access-date=2024-04-02 |website=EIU Corporate Network |language=en-GB}}</ref> referring to how the US dollar was managed primarily for the US' interests despite it being the currency primarily used in global trade and global finance. A strong dollar is recognized to have many benefits but also potential downsides. Domestically in the US, the policy keeps [[inflation]] low, encourages [[foreign portfolio investment|foreign investment]], and maintains the currency's role in the [[global financial system]].<ref>{{cite web|last=Twaronite|first=Lisa|url=http://www.marketwatch.com/story/us-strong-dollar-policy-is-a-fairy-tale-that-sends-a-message?pagenumber=1|title=Strong dollar policy is useful fairy tale for U.S.|publisher=Marketwatch|date=29 January 2008|access-date=23 August 2011}}</ref><ref name=":4">{{Cite web |title=Strong Dollar: Advantages and Disadvantages |url=https://www.investopedia.com/articles/forex/051415/pros-cons-strong-dollar.asp |access-date=2024-04-02 |website=Investopedia |language=en}}</ref> Globally, a strong dollar is thought to be harmful for the rest of the world.<ref>{{Cite web |date=2022-10-20 |title=Global Repercussions of the Strong Dollar {{!}} Econofact |url=https://econofact.org/global-repercussions-of-the-strong-dollar |access-date=2024-04-02 |website=econofact.org |language=en-US}}</ref> In financial markets, the strength of the dollar is measured in the "DXY Index" (sometimes named the "USDX index"), an index which measures the exchange rate of the dollar relative to other major currencies.<ref>{{Cite web |title=What Is the U.S. Dollar Index (USDX) and How to Trade It |url=https://www.investopedia.com/terms/u/usdx.asp |access-date=2024-04-03 |website=Investopedia |language=en}}</ref><ref>{{Cite web |title=DXY {{!}} U.S. Dollar Index (DXY) Overview {{!}} MarketWatch |url=https://www.marketwatch.com/investing/index/dxy |access-date=2024-04-03 |website=MarketWatch |language=en}}</ref>
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