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Illustration: Lazaro Gamio/Axios

The strength of the dollar is creeping in as a major worry for business leaders, and it's looking poised to grow stronger.

Details: The dollar index, which measures the greenback's strength against currency peers like the euro, yen and British pound, is rising toward its highest level since 2017.

Why it matters: On earnings calls so far in the first quarter, FX and currency worries, aka the dollar's strength, has been the most cited negative by S&P 500 companies.

  • A strong dollar makes U.S. exports less competitive and eats away at profits for U.S.-based multinational firms.

The big picture: The dollar also has been strengthening against the currencies of emerging countries, like China, where many American businesses generate significant revenue.

Between the lines: Companies generally don't change prices because of currency fluctuations, so a hypothetical 20-yuan Big Mac could translate to $3 when the dollar is weak, but only $2.90 when it's strong.

  • McDonald's sells over 1 billion Big Macs a year in China, so that number makes a big difference.
  • "The dollar rally is back on track as the divergence theme re-emerges," Win Thin, global head of currency strategy at Brown Brothers Harriman, wrote in a note to clients. "For EM, that has translated into broad-based losses this past week ... and we see further EM losses ahead."

Unfortunately for nervous executives, even though the Fed has paused its interest rate hiking cycle, U.S. rates are among the highest in the developed world and other central banks are taking measures likely to weaken their currencies.

  • The European Central Bank looks poised to institute more stimulus measures to support sputtering growth in Germany, Italy and Sweden.
  • Economists increasingly expect the Bank of Japan to add stimulus, according to a Bloomberg poll.
  • The Bank of England is likely on pause until a resolution is found for Brexit and the central banks of Australia and New Zealand have both been sending dovish messages, suggesting rate cuts may be coming soon.

The bottom line: Investors buy the dollar when they are worried about global growth and when U.S. economic data is strong. After weak manufacturing readings in Germany and Japan and strong U.S. retail sales and 50-year-low initial jobless claims data last week, both themes look fully in force.

Go deeper

First look: Senators propose bill to ban corporate PACs

Sens. Jon Ossoff and Mark Kelly. Photos: Chip Somodevilla (left), Courtney Pedroza/Getty Images

Sens. Mark Kelly (D-Ariz.) and Jon Ossoff (D-Ga.) will soon propose a bill prohibiting for-profit corporations from establishing and managing political action committees, according to a copy of the legislation obtained by Axios.

Why it matters: The introduction of "The Ban Corporate PACs Act" comes amid heightened scrutiny on Capitol Hill regarding money in politics, including efforts to bar companies from influencing political campaigns and federal elections. It would likely face a court challenge and First Amendment concerns.

58 mins ago - Technology

Exclusive: YouTube shuts down two Oath Keepers channels

Stewart Rhodes, founder of Oath Keepers. (Photo: Aaron C. Davis/The Washington Post via Getty Images)

YouTube has deactivated two channels linked to the Oath Keepers militia group whose members have been charged in relation to the January 6 Capitol riot, the company told Axios.

The big picture: Social media platforms that were used to plan or promote the Capitol attack have moved with varying degrees of speed to bar the accounts involved.

FAA clears more planes after 5G fears

Photo: David McNew/Getty Images

The Federal Aviation Administration said Thursday it had approved nearly 80% of the U.S. commercial fleet to perform low-visibility landings at airports with new 5G services after fears of signal interference limited 5G rollout.

Why it matters: The FAA approvals will help provide more certainty after the agency raised fears that 5G signals could reduce the accuracy of certain equipment, known as radio altimeters, that helps planes land and take off in inclement weather.