Currency risk
When your return comes to you in a currency other than the U.S. dollar, you have to convert your earnings or income to dollars to be able to use it at home. Whatever the exchange rate is at the time will affect your total return.
At times when the dollar is strong in relation to other currencies, travelers rejoice, since their dollars will buy them more local currency at their destination. However, returns from international investments are diminished when the dollar is strong, since you'll be able to buy fewer dollars with your rupees, euros, yen, or other currencies.
But when the dollar is weak, it's a boon to international investors, even if it's a costly inconvenience for travelers. That's because your investment returns, whether in rupees, euros, yen, or otherwise, will buy more dollars, increasing your total return.
In some circumstances, a weak U.S. dollar may boost U.S. financial markets. For example, in 2003, when the U.S. dollar was falling from its peak values of 2001 and 2002, global U.S. firms, such as GE, Microsoft, Intel, and others, performed very well on the stock market. That's because profits that these multinational U.S. firms earned overseas benefited from the high valuation of other countries' currencies when those profits were converted into U.S. dollars. Similarly, U.S. companies that export U.S.-made products benefit from a weak dollar, when their overseas profits are translated back into U.S. dollars.
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Jeffrey Rosensweig, Goizueta Business School, Emory University 