How a stronger U.S. dollar impacts you

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The dollar index, which measures the U.S. dollar against a basket of currencies, has surged as much as 5% since Trump's win, trading at its highest level in two years.

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The downstream effects can be both good and bad. On one hand, a stronger U.S. dollar means more purchasing power when paying for goods priced in other currencies. This is especially felt when traveling abroad and dealing with exchange rates. Additionally, it can make buying foreign goods that are exported to the U.S. cheaper, so consumers can feel the benefits without having to leave the country.

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On the other hand, a stronger U.S. dollar might not be great news for your investment portfolio. This is especially true for companies that generate a high portion of their revenue overseas. If the U.S. dollar is strong, and the local currency in which they are conducting business is weak, they’ll ultimately see weaker profits when they convert into dollars. This could result in less profitability, which could negatively impact stock prices.