A strong dollar is usually viewed as a good thing for the U.S., but it may not be so good for some of the Dow Jones Industrial Average's most well-known names. As the dollar goes up, companies with a large portion of sales overseas will see currency headwinds as those sales translate into fewer U.S. dollars.
Coca-Cola (NYSE:KO) and IBM (NYSE:IBM) have already reported a big impact from currency fluctuations, and 3M (NYSE:MMM) will see the same when it reports later this week. But unfavorable exchange rates aren't the end of the world, because they often even out for companies in the long term.
In the video below, Motley Fool specialist Travis Hoium goes through some of the nuances of currencies and what to expect from these three companies going forward.
Travis Hoium manages an account that owns shares of 3M. The Motley Fool recommends 3M and Coca-Cola. The Motley Fool owns shares of Coca-Cola and International Business Machines and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.