July 2021 – New VoxEU Column: Dollars and exports: The effects of currency strength on international trade

By Valentina Bruno and Hyun Song Shin

The strength of the US dollar in currency markets has drawn the attention of researchers, policymakers, and businesses for decades. This column examines the effects of the dollar on international trade, with a particular focus on exports. A strong dollar dampens trade volumes through the financial channel, outweighing any improvement in trade competitiveness. Trade activity is strong when the dollar is weak, but global trade suffers when the dollar is strong.


Link:
Dollars and exports: The effects of currency strength on international trade