Market selloff is about the dollar: Koesterich

The continuing strengthening of the dollar is weighing on U.S. equity markets even though little has changed since Friday's positive jobs report, BlackRock's chief global investment strategist told CNBC on Tuesday.

The markets opened sharply lower Tuesday. (See what that markets are doing now.)

"You've got the dollar up about 23 percent from the summer lows, and people are realizing this is starting to bite into earnings" BlackRock's Russ Koesterich said during a "Squawk Box" interview.

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A stronger dollar makes U.S. goods more expensive abroad and dilutes the value of earnings when American companies bring overseas profits back home. With price-to-earnings ratios already fairly extended, it will be harder for the United States to post gains this year without earnings growth, he said.

The dollar is due for a pullback at some point this year because it is currently at the center of an incredibly crowded trade, Koesterich said. He expects the dollar to continue to appreciate as monetary policy around the world remains loose.

"The fundamentals are what they are and the reality is the U.S. is going to outgrow Europe and Japan, the path of U.S. monetary policy is very different than the rest of the world, and you've got a much lower current account deficit because of domestic oil production, all of which favor a stronger dollar over the next few years," he said.