Even though the dollar has surged and the U.S. economy is outperforming the rest of the world, investors need to be concerned, says Societe Generale head of U.S. macro strategy Lawrence McDonald.
"The dollar is creating tremendous systematic risk," McDonald said Tuesday on CNBC's "Futures Now. "
One issue is created from crude oil, given that crude oil prices are inversely related to U.S. dollars, since as the value of the dollar increases, it takes fewer of those dollar to buy a barrel of oil.
"As the dollar goes higher, it drives oil lower. Russia is now junk [in its credit rating], but it's not just Russia. If you look at the corporate debt market, and the number of companies that are tied to Russia's fate, you just have a situation where there's tremendous systemic risk that's tied to oil."
On Wednesday, crude oil closed at a fresh six-year low, which appeared to weigh heavily on equities.
The other issue is American exports. As the dollar strengthens, U.S. companies are either forced to raise foreign prices to maintain margins or accept fewer dollars for their goods.
"On the export side, there are very strong negatives" due to the rising dollar, McDonald said.
But the more fundamental problem is that the U.S. cannot continue to grow alone, so the factors leading to the rise of the dollar will eventually come home to roost, according to the strategist.
"The U.S. is no longer strong enough to hold up the globe," he said.