Under normal circumstances, a stronger dollar is not a good thing. After all, a stronger dollar will drag down the country's exports, reduce economic income and cause a fiscal deficit. The high interest rate policy in the United States has prompted a large amount of capital to flow into the United States from Japan and western Europe, which has freed the United States from the trouble of low employment rate and thus carried out economic recovery.

Definition of dollar index: dollar index? USDX is an indicator that comprehensively reflects the exchange rate of the US dollar in the international foreign exchange market, and is used to measure the degree of exchange rate change of the US dollar against a basket of currencies. It measures the strength of the US dollar by calculating the comprehensive rate of change between the US dollar and a selected basket of currencies, thus indirectly reflecting the changes in US export competitiveness and import costs.

The significance of a stronger dollar:

(1) Impact on US interest rates: Generally, when US interest rates fall, the trend of the US dollar will weaken; American interest rates have risen, and the dollar has a preference. In the first half of 1980s, although there were a large number of trade deficits and huge fiscal deficits, the US dollar remained firm, which was the result of the high interest rate policy of the United States, prompting a large amount of capital to flow into the United States from Japan and Western Europe. The trend of the dollar is greatly influenced by interest rate factors.

(2) Impact on the US stock market: The Dow Jones Industrial Average has the greatest impact on the US dollar exchange rate. Since the mid-1990s, there has been a great positive correlation between the Dow Jones Industrial Average and the US dollar exchange rate (because foreign investors buy American assets).

(3) Impact on Euro: The US dollar index is basically a weighted index of a series of exchange rates, so it is ultimately reflected in the strength of freely convertible currencies between the United States and its major trading currencies. The euro is the most important currency in the basket of currencies formed by the US dollar index, and the trend of the euro naturally becomes an important factor affecting the US dollar index.

(4) Impact on international commodities: Most commodities in the international commodity market are denominated in US dollars, so commodity prices are negatively correlated with the US dollar index. The dollar index fell, while commodity prices rose.