The U.S. dollar is hitting seven-month highs as the probability of a December rate hike continues to increase. According to Morningstar, if the Federal Reserve Board raises rates after all, the greenback might rise even higher.

Retailers have been hurt all year from the strong dollar as they have had issues with currency translation. Many earnings announcements came with the clause “Sales would’ve been [fill in the blank] if it weren’t for currency headwinds.”

Wal-Mart Stores Inc. reported first-quarter revenue of $114 billion, down 0.1 percent from the same quarter the previous year. According to the store, global currency fluctuations were responsible for a loss of $3.3 billion in net sales.

BlackRock said that dollar rallies last years, not months, so retailers have been forewarned about the currency’s value continuing to rise and can make adjustments. The key is which retailers are better equipped to address the rise in value.

“It was a much bigger problem in the fourth quarter of last year, due to the rapid appreciation of the dollar,” said retail expert Jan Kniffen of Kniffen Enterprises. “Now they’ve been watching this death by a thousand cuts over the year and they are doing a better job of hedging and pricing.”

But not every company is able to employ currency experts to forecast and react to currency fluctuations. ‘The big guys like Wal-Mart, Kohl’s, Macy’s and Target can all address the dollar,” said Kniffen, “Smaller companies don’t have that ability.”

Tiffany & Co. sounds like it is already making preparations for that scenario. At the Goldman Sachs Retail Conference, Frederic Cumenal, chief executive officer, said, “So, I’m not betting on it, but I can imagine that we are going to remain in a position where the U.S. dollar is going to remain quite strong, because it’s probably not over and not done yet….making the case for us for a more stable pricing management.”

David Nelson, chief strategist at Belpointe Asset Management, thinks U.S.-based retailers will be the ones to benefit over global retailers. “For the domestically based retailers, the strong dollar is net positive.” He went on to say, “The consensus is that the dollar will stay strong because it looks like the Fed will move.”

So if the Federal Reserve makes its anticipated rate hike in December, retailers will be well-prepared for the dollar to get stronger. But if the Fed doesn’t do anything, as has been the pattern, these preparations could come back to hurt them.

“Everyone always assumes they will raise rates, and that’s always a dangerous assumption,” said Kniffen.

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