(Eli5)Why will US companies, or companies in general thrive when US dollar value is strong? Does it have something to do with currency conversion?
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It’s different for different companies.
Yes, currency conversion matters. A strong dollar makes imports cheaper and exports more expensive for companies inside of the US (and opposite outside of it). That means if you buy steel from china to make cars that you sell to US costumers it’s great when the dollar is strong because you get more steel per dollar. If you export almonds you grew in california to europe then a strong dollar is bad for you though, because your costumers can pay less.
A strong dollar means that their money can buy more stuff in other countries. It makes foreign investment cheaper
A strong US dollar is great for importers and bad for exporters.
If you’re buying raw materials from somewhere, having your currency worth more of theirs makes it cheaper to buy from them. You can import more for the same USD cost.
If you’re trying to export though the reverse applies – your goods are now more expensive to someone trying to pay in a different currency.
It’s good on average for the US consumer because we import more than we export, but certain export focused industries will suffer.
American companies do most/much of their business is with Americans, so currency conversion does not matter. And importation of goods or materials is cheaper.
The USA imports way more goods than they export. A strong dollar means they get more bang for their buck when importing stuff. Suddenly 1 dollar may be worth 2 items instead of one. With more resources in the country, you can produce more.
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