In the Nixon administration, Treasury Secretary John Connally famously told a group of central bankers that although the dollar may be the United States’ currency, it becomes other countries’ problem. This sentiment still holds true today, as the strong dollar is causing some challenges for economies abroad but is not significantly affecting the US economy.

Currently, the Bloomberg Dollar Spot Index is near a five-month high, showing significant gains against major currencies such as the South Korean won, the Japanese yen, and the Swiss franc in recent months. Finance ministers in South Korea and Japan have expressed concerns about this trend, but it is not causing widespread fear on a global scale.

However, unlike previous episodes of dollar strength, the current situation poses a major threat to economies abroad but not significantly affecting the US economy. The strong dollar may cause some minor disruptions abroad, but for the most part, it remains unscathed by its effects.