[expat_panama]

Thanks for the heads-up!  It's looking like there are two issues here, one is how the dollar exchange rate interacts with U.S. corporate profits, and the other issue is why the Associated Press says the strong dollar is causing falling profits.  The first one's easy, we just look:

Not much interaction; in fact profits are up a lot while the dollar's up just a bit.  It's true that some corps get hurt when they can't sell products to foreigners but at the same time businesses that buy foreign raw materials for U.S. factories are helped.  America has a 'trade deficit'.  That means more are helped than hurt.  My guess as to why the AP is saying the dollar hurts profits is that they need to sell stories and this one's believable especially to the 'profits are down' crowd.  Big crowd.  The right wants to believe businesses are dying and the left wants businesses to die.  Those of us not allergic to good news are happy it's not true. 

Ah.  Also on AP's agenda is the idea that American economic problems are not because of taxes or regulations but because the U.S. dollar is stronger than ever.

[Lurkina.n.Learnin]

Thanks. I pretty much agree although woodbutcher1963 has a valid point. I grew up in the timber industry and have witnessed the strong dollar/ Canadian imports before. That’s one of those consequences. Your chart shows that overall there is no correlation.