Volkswagen U.S. CEO to Testify before Congress Thursday.
LAKE: It is the reserve currency of the world. With the U.S. dollar growing in strength, markets around the globe are feeling the ripple effect. Max Foster takes a look at the power of the greenback in today's "Market Movers and Shakers."</s>MAX FOSTER, CNN CORRESPONDENT (voice-over): America's dollar has seen its fastest rise in 40 years. But is a strong greenback good or bad for the global economy? It's certainly good for U.S. consumers. They'll pay less for French wine, Italian leather and other imports. It also means cheaper gasoline, since the rising dollar puts pressure on oil prices. A strong dollar isn't so good for U.S. companies having to sell more expensive products overseas. Profits suffer and so do stock prices. Of course, what's bad for U.S. multinationals can be good for European and Asian companies. A strong dollar makes those products more competitive against American goods, resulting in a more balanced global marketplace. For emerging markets, a strong dollar can be really tough. Debt is often in dollars and paying it back with weaker local currency can be more expensive. In the early 1980s, the dollar's rally helped trigger Latin America's debt crisis. Fifteen years later, another surge helped spark the Asian financial crisis. So is a strong U.S. dollar good for the global economy? The answer isn't yes or no. It's yes and no.</s>LAKE: Ramping up the trade opportunities, we speak to the U.S. Secretary of Commerce as she visits Cuba.</s>LAKE: Hello, I'm Maggie Lake. Coming up on the next half hour of "Quest Means Business," the IMF warns of new risks for markets on the eve of its big meeting in Peru. And a controversial textbook forces an apology from one of the world's biggest education companies. The CEO of McGraw-Hill Education will be joining me live in the studio. Before that, these are the tope news headlines we're following for you this hour. Russia has begun naval strikes against ISIS targets in Syria. Officials in Moscow say four ships fired more than two dozen missiles from the Caspian Sea. Russian forces also appearing to be coordinating airstrikes with a regime of Syrian President Bashar al-Assad. U.S. Defense Secretary Ash Carter says he is concerned about Russia's motives in the region.</s>ASH CARTER, U.S. DEFENSE SECRETARY: We believe Russia has the wrong strategy. They continue to hit targets that are not ISIL. We believe this is a fundamental mistake. Despite what the Russians say, we have not agreed to cooperate with Russia so long as they continue to pursue a mistaken strategy.</s>LAKE: U.S. President Barack Obama has called the president of Doctors Without Borders to apologize after the U.S. bombed one of its hospitals in Afghanistan. The group is demanding an independent investigation into possible war crimes. At least 22 people were killed in Saturday's attack. The commander of U.S. forces in Afghanistan said the hospital was hit by mistake. The group's president said it should have been obvious what the building was.</s>DR. JOANNE LIU, PRESIDENT, MSF INTERNATIONAL: Millions of people don't have access to this kind of care. We had 13 surgeons and physicians in this hospital. We had eight ICU beds, you know, with ventilator. This was high tech medicine. This was not the little bush hospital. You could not miss it.</s>LAKE: Lawyers for FIFA's president Sepp Blatter have denied a report that he has been provisionally suspended. They say FIFA's ethics committee hasn't notified Blatter of any action taken against him. It comes as FIFA is trying to deal with allegations of corruption. The FBI has helped authorities in Eastern Europe thwart the smuggling of radioactive and nuclear material. That's according to a U.S. law enforcement source. The sting operations took place several years ago in Moldova and are just coming to light. There were concerns the material would be sold to extremist groups. Parts of Northeastern China are choking on thick smog. The country's National Meteorological Center issued an alert warning people to reduce outdoor activities. And the U.S. Embassy in Beijing said the air quality there has reached hazardous levels. U.S. stocks closed higher on Wednesday. The Dow ended the session up 122 points. U.S. indices were lifted by a surge in biotech shares. The IMF warns global markets are facing new threats. The Fund is warning of a quote "triad" of risks. Emerging markets are particularly vulnerable to turmoil in China and rising rates in the U.S. The IMF also warned of high debt in advanced economies like Europe and weak markets which are still suffering from a lack of liquidity. Jose Vinals is the director of the IMF Monetary and Capital Markets Department. He says that if those risks aren't handled properly, it could set back global growth. Mr. Vinals joins me now from Lima. Thank you so much for being with us today. Let me ask you, is this a situation when we're looking at emerging markets, do these governments have the tools to be able to do something to weather this combination of a slowing China and possibly rising rates in the U.S.?</s>JOSE VINALS, DIRECTOR, IMF MONETARY AND CAPITAL MARKETS DEPARTMENT: Emerging markets are now confronted with important challenges. And the best thing they can do now is to make sure that their financial systems are resilient in a context where their companies had borrowed quite a bit. And a lot of this borrowing - the majority of it - has been from local banking systems. So enhancing the resilience of the banks is very important. And in addition, I think that if emerging markets can make sure that their inflation remains under control, and that the public finances in those cases were designated (ph) move towards a path of consolidation, this will give them more degrees of freedom in order to, you know, to counter negative situations in the future.</s>LAKE: Are we talking about a risk to the entire global system? I mean, when you lay out that scenario, it makes people very nervous that we're looking at another Asian financial crisis, something that is exported throughout the world.</s>VINALS: No, I don't think that we are on the verge of another Asian financial crisis. And in fact, if you look at the emerging markets now and compared to where we were before the Asian financial crisis, emerging markets have come a long way. In terms of better macroeconomic policy frameworks, much more resilient financial systems, there is a lot more floating exchange rates which is a very good first line of defense. And they also have a lot more foreign exchange reserves. But it's true that there are vulnerabilities which have built up in the form of a lot of leverage in the private sector. And this is something that needs to be taken care of, especially by safeguarding the stability of the local domestic banking systems which, as I mentioned before, are the worlds (ph) ahead provided more of the lending - most of the lending - to his corporates (ph).</s>LAKE: As you probably point out, this is all happening at a time when global markets are very volatile. Investors are very, very nervous, we've seen very big swings. So much pressure has been on central banks - they have done all they can do some people feel. Where are we going to get the safeguards? What - where are the policy prescriptions going to come from in order to prevent some of these risks, in order to boost global growth?</s>VINALS: Well I think that for global growth we are calling in these meetings at the IMF for an urgent upgrade of policies worldwide, going well beyond monetary policies. Monetary policies can no longer be left home alone. You need the structural reforms to be there, you need supported fiscal policies to be there, consistently with debt sustainability and you also need that some key countries like China which are now at the center of many concerns manage the challenges that they have before them in a successful - in a successful way. So there are many things that go beyond monetary policy and they need to happen both in advanced economies and in emerging markets. Even in Europe where the situation is now far better than it used to be a few years ago, still there are issues to complete the financial architecture of the UA area (ph) in terms of the banking union and to address the non-performing loan issues which remains in the banking systems. In advanced economies like the United States, you still need to normalize monetary policies and do that in a way which is both gradual, non-traumatic and therefore it has to be well communicated to the markets. So there are plenty of things to do, not just for emerging markets but also for advanced economies.</s>LAKE: The list of challenges for you to talk about there in Lima, Peru is high indeed. Jose Vinals, we're going to let you get back work. Thank you so much for joining us. Now, Richard will be hosting Thursday's show live from Lima at the IMF annual meeting. He'll chairing a panel with managing director Christine Lagarde as well as the Bank of England governor Mark Carney and Brazil's finance minister Joaquim Levy. You can see that at the same time, same place right here on CNN. You won't want to miss it. Now the U.S. Commerce Secretary Penny Pritzker tells CNN Cubans are eagerly awaiting U.S. investment. She is in Cuba to ramp up business opportunities for American companies. Pritzker is the first commerce secretary to visit the country since 1950. Let's go to CNN's Patrick Oppmann who is in Havana. I mean, Patrick you had a chance to come up - catch up - with the commerce secretary. A lot of opportunity but I know a lot of that opportunity is something that Cuban companies want to seize for themselves.</s>PATRICK OPPMANN, CNN'S HAVANA-BASED CORRESPONDENT: Oh absolutely. But, you know, Maggie, let's just back up for a minute. It seems incredible, almost unthinkable that we're talking about a U.S. cabinet secretary. Not just any cabinet secretary, but the secretary of commerce of all things visiting Communist-run Cuba. But that's what's been happening the last two days. Commerce Secretary Penny Pritzker has been traveling around Havana seeing a wide range of Cubans, meeting with Cuban officials. And she told us they're not only welcoming her, they're welcoming the prospect of U.S. investment in Cuba.</s>PENNY PRITZKER, UNITED STATES SECRETARY OF COMMERCE: -- that I've met with have been very forward-leaning and wanting more American foreign direct investment. We obviously have limitations on what we can do today under our own laws, and so we're trying to find places where we can do things together now, where we can make progress around now within the limitations that both our governments have And then see as we build more trust, more confidence, do more together, see then where we can go with all of that.</s>OPPMANN: And, Maggie, a lot needs to change before you will have Starbucks, McDonald's, U.S. hotel chains opening up in Cuba. For one, Penny Pritzker was fairly outspoken today, meeting with Cuban officials, talking about the need for U.S. companies to hire Cubans directly. That's something right now that's impossible. International companies have to hire through the Cuban government all of their employees. That makes it very difficult, very cumbersome. So the number of regulations that certainly the U.S. would like to see change, the Cubans of course have been continuously pushing for the U.S. trade embargo to be lifted. But, again, she told us that she cautioned them that it's up to Congress. But there's a lot changing. There's more and more openings for U.S. companies to get here, to do business. And for every company that is opening up operations in Cuba, there are many more that want to do it that are so far restricted by U.S. law. But Penny Pritzker told me that U.S. companies need to start coming up with Cuba plans because the day is coming when very soon they should be able to have that opportunity for the first time in over a half century where they could potentially invest in Cuba. And that will be certainly a historic day when that happens, Maggie.</s>LAKE: That certainly will. Very interesting that she said that. Changing so rapidly there. Patrick, thank you so much for that. Patrick Oppmann. Now, faster than a speeding bullet - we'll take you onboard Japan's world famous bullet trains after this super quick break.