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PORT WASHINGTON, N.Y. (MarketWatch) — With apologies to Mae West, too much of a good thing is not always so wonderful.

Last week the dollar DXY, +0.07%  reached a six-year high against the Japanese yen USDJPY, +0.14%  in world financial markets. It has also been soaring against the currencies of Western Europe.

Also last week, for example, the buck bounded to a 14-month high against the euro EURUSD, -0.24%. And against a group of major currencies, the dollar has shot higher by nearly 5% over the past four months alone.

There are several reasons for the greenback’s remarkable rise. They fall into two categories: geopolitical and economic.

As far as world politics is concerned, investors have tended to shy away from Europe because of the situation in Ukraine, as well as in other nearby countries. The flare-up in the Middle East isn’t helping things, either. For its part, Japan has its issues with neighboring China.

On the economic front, the economies of Europe, Japan, Russia and even China are weakening, while growth in the U.S. is proceeding at a steady, albeit moderate, pace.

As you might have deduced by now, the muscular dollar is conferring both good news and bad news on our economy.

The good news is already apparent in the price of oil, which as you know is a key import. In the past three weeks, the price of gasoline at the pump has fallen by half a dollar or more per gallon. Other goods that emanate in whole or part from abroad cost less as well.

These price declines have the effect of putting more buying power in shoppers’ wallets. For example, a 50-cent drop in gasoline prices will give motorists $50 billion over a year’s time.

This is not exactly chopped liver, even in an economy as big as ours. Add in other imports and you can see where the stronger dollar is giving quite a fillip to our economy, which can use every shot in the arm it can get.

What about the bad news, you might ask. After all, everyone knows that the economics coin has two sides. OK, here is the other side: A strong dollar is usually bad for corporate profits. It hurts U.S. exporters by making their goods more expensive overseas. It also makes them less competitive here at home.

A bloated buck hurts profits in other ways. For instance, money earned in foreign currencies is worth less when it is converted back into dollars.

Wall Street has another reason for not liking a strong dollar: It makes it tougher for foreign investors to pony up enough cash to buy U.S. securities. By the same token, it makes it easier for U.S.-based investors to participate in foreign markets.

Here at home, a strong dollar tends to make it more difficult for foreigners to buy U.S. goods, such as real estate, pricy shoes, pocketbooks and the like. That said, the better growth and higher interest rates stateside make the U.S. a more attractive place for foreigners to invest.

To do this they need to sell their currencies for dollars. This has the effect of pushing the greenback even higher.

Is this a vicious cycle or a virtuous cycle? It all depends on which side of the coin suits your needs.