Hey now, look who's making a comeback! The dollar has strengthened significantly compared to most currencies except the yen, and this month alone it has gained 11 percent against the euro. It could be a temporary trend that disappears as quickly as it happened, but The Wall Street Journal helps us understand how the current comeback affects Americans.
- Investors: Because a stronger dollar pushes down the value of foreign assets, overseas investments will take a hit.
- Consumers: A strong dollar will make imported goods cheaper, but any potential discounts depend on how flexible brands are with their suggested retail prices. While it's up in the air if the price of European designer goods will come down, the cost of European wine should fall 10 to 15 percent. Expect European auto makers to remain resilient to a strengthened dollar.
- Travel: International airfares aren't budging yet but this could change, and in general a stronger dollar is good for some Americans who are pleased about more affordable shopping abroad. The biggest bargain is Iceland — airfare is 21 percent lower than last year, and any service that requires labor like tours or spa treatments are about 50 percent lower.