Investors are ignoring the strong dollar at their peril

The dollar is on a hot streak, a resounding vote of confidence in the U.S. economy. But for U.S. corporations that rely on foreign sales, a firmer currency is a headache that won’t go away and most investors are being much too complacent, according to the world’s largest asset manager.

“Going into 2016, a stronger dollar and the advent of a tightening cycle, even a gentle one, could impede both U.S. earnings growth and multiple expansion,” warned Russ Koesterich, BlackRock Global Chief Investment Strategist, in a blog post earlier this week. “For now, however, based on last week’s U.S. stock market performance, investors appear to be overlooking this fact.”

The S&P 500 SPX, -0.03% is on a six-week winning streak after surging 8.3% in October, its best monthly performance in four years.

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