Thursday, 30 April 2015

The Impact of a Strong Dollar

It is undeniable that most products are trying to be more competitive to succeed in the global market; however, nowadays, it is hard to get the success like the past since the global economics has already changed. 

According to the BBC News “US growth: First casualty of astrong dollar” (Yueh, 2015), a strong of the US dollars has a great impact on exports by falling 7.2%; nonetheless, the problem attracts an investment in imports and increase consumption rate. As a result, the US growth rate in the first quarter is lower than expected rate; it grows just 0.2%.

In addition to the impact of the strong dollar, it seems that the problem leads to other results in the countries around the world because the United States is one of the great powers. When a slowdown in the US economy has already happened, the global economy absolutely obtains the effect. The strong dollars makes the US currency rate for selling lower than that of the past. I believe that most exporters do not like the situation because they cannot earn much money compared to the normal financial situation. I believe that the problem causes the quantity of goods for sale is not enough for people in other countries. Finally, the product prices are so expensive.

Although the strong dollar problem has a bad effect on exporters, it has benefits for investors/importers and consumers. Most entrepreneurs desire to invest in some businesses in low cost in order to get a lot of profits as much as possible. The BBC News article said that investors can import goods cheaper and maintain down price rises. Lower cost and down rise price lead to attract consumers to buy the import goods; consequently, a lot of profits can make easily.

In terms of education and traveling for foreigners, it has a number of advantages; for example, if I would like to travel to the US while the problem is occurring, I will exchange my money from Thai baht to US Dollar more than I ever in the past.

So, it has both benefits and shortcomings for the strong dollar problem; however, it seems to weigh in the shortcomings that the US should solve the problem as much as possible.  

Reference.
Yueh, L. (2015, April 29). US growth: First casualty of a strong dollar. BBC News Business. Retrieve from http://www.bbc.com/news/business-32512640

5 comments:

  1. As I read Gift's post, I was wondering: How does this affect her? It doesn't affect me very much, at least not that I know of. On the other hand, the falling Australian dollar does affect me: I have less money to spend in Thailand.

    I like the connection Gift makes with the effect that one large economy can have on others. The slow down in the Chinese economy has had a big effect on the Australian economy, which has caused the decline in value of the Australian dollar, so I'm selfishly hoping that the Chinese economy heats up again.

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    1. I think it affects me because in June I have already planned to been to US for my Master's degree. Soon, I have to exchange my Thai Baht to US dollar, which make me lucky because I will have more money to spend in the US. However, the crisis also affects my US scholarship since the US university have faced with finding the financial support that makes me difficult to get the scholarship until the first year of the Master's degree.

      I agree with you that if one large economy such as US, china slows down, it will be a big effect on others.

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  2. My mother is working in the American company and she take her salary in both US dollar and Thai baht. She complained a lot about the strong dollar problem because it lessen her earning. She said it is almost a half lessen comparing to the last 10 years (in the dollar part).

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    1. Really!!! looks terrible!!! My sister also is working in the US and now she told me that her bonus is tending to decline. Besides, the strong dollar also affect admission to the Master's degree in this year because hardly do I support from my university for tuition fee. Last but not least, I wish the US economy will be better that is a good thing for other countries especially in our country, Thailand.

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