The U.S. dollar is strong right now. But not everyone is happy about that

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Federal Reserve today is expected to hike interest rates again, widely expected to be a three-quarters of a percentage point increase. To get ahold of inflation, the Fed has been raising rates at the fastest pace in a generation, which has also strengthened the value of the U.S. dollar. A strong dollar sounds good, but as NPR's David Gura reports, it's a problem for companies that do business globally and also for many countries around the world.

DAVID GURA, BYLINE: At a time when there are plenty of economic issues, including labor shortages, high inflation and fallout from the war in Ukraine, the value of the U.S. dollar has gone up, relative to other currencies. Investors see it as safe and, also as interest rates go up, as a pathway to higher returns. But there are downsides to dollar strength, and big multinationals know this firsthand. Salesforce is a $150 billion business that sells software to companies to manage customer data. Here's CEO Marc Benioff on a recent call with Wall Street analysts.

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MARC BENIOFF: We had a great quarter, but yet again, the dollar had an even stronger quarter, and we continue to see the impact on foreign exchange and currency fluctuation on our financials.

GURA: Salesforce is based in San Francisco, but it sells products all over the world, in different currencies. Michael Klein is a professor of international economic affairs at Tufts University, and he says when a company like Salesforce converts what it makes into dollars, it gets squeezed.

MICHAEL KLEIN: Repatriated profits from abroad in euros or pounds or yen are going to be worth less in dollars because the dollar is stronger.

GURA: Salesforce expects, in this fiscal year, a stronger dollar is going to cost it more than $800 million. Klein says this is a very tough environment for most U.S. exporters.

KLEIN: People who are trying to sell goods abroad will find that a strong dollar makes it more difficult because it makes American goods more expensive in other countries.

GURA: So the U.S. is effectively spreading inflation to other countries that are already dealing with higher prices. Now, of course, this cuts both ways. This is a good time for U.S. importers who are buying goods from overseas and for U.S. travelers heading abroad. For them, the world is on sale. Big companies hedge against currencies strengthening and weakening, but some executives say this has gotten more difficult because of economic uncertainty and because there's been so much volatility. Joe Wolk is the CFO of Johnson & Johnson.

JOE WOLK: It's not just that the euro and U.S. dollar have reached parity.

GURA: Meaning $1 equals 1 euro, which happened in July for the first time in 20 years. And the two currencies are still pretty close to even.

WOLK: It's also the rapid pace at which the fluctuations are occurring.

GURA: Which makes hedging more difficult. Right now the strong dollar is a real concern for emerging economies in particular, countries that sell wheat and oil and other commodities. Many of them are priced in dollars, so they've gotten more expensive. And Michael Klein at Tufts notes that on top of that...

KLEIN: Much of emerging market debt is also denominated in dollars. So when the dollar is stronger, it becomes harder to pay back debt.

GURA: Argentina is confronting this, along with Brazil and Colombia and many other countries. The dollar is not expected to weaken any time soon. First and foremost, the Federal Reserve is expected to keep raising interest rates aggressively. And on top of that, there is huge demand for U.S. energy from Europe, which is weaning itself off Russian oil and gas. Jordan Rochester is a foreign exchange strategist at Nomura Securities.

JORDAN ROCHESTER: That story is not going away anytime soon. It's going to accelerate as we go into the winter.

GURA: That may be good news for U.S. energy exporters, but it all but guarantees there will be more hurt in a year that's already been painful.

David Gura, NPR News, New York. Transcript provided by NPR, Copyright NPR.