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(Corrects currency gains in fourth paragraph. Click Davos for more on the World Economic Forum.)

(Bloomberg) -- U.S. Treasury Secretary Jacob J. Lew says a strong dollar is “good for America.” Other delegates in Davos aren’t so sure.

“I’m going to repeat what I and all my predecessors have always said, which is a strong dollar is good for America,” Lew told Bloomberg Television’s Erik Schatzker at the World Economic Forum’s annual meeting in Davos, Switzerland. “We have an economy which, on a relative basis, is a lot stronger than other economies in the world.”

Lew spoke a day after the European Central Bank boosted stimulus with a pledge to buy as much as 1.14 trillion euros ($1.28 trillion) in assets including government bonds. That sent the euro tumbling and underscored a divergence between the monetary policies of the euro area and the U.S., where the Federal Reserve expects to start raising interest rates this year.

Lew’s tolerance for dollar strength contrasted with concern raised by many delegates at the Alpine conference that the dollar’s surge may soon start to hurt the U.S. economy. The greenback has jumped 22 percent against the euro in the past year to its highest in 11 years, and is up 14 percent versus the yen.

A rising currency makes American imports cheaper, weighing on already-soft inflation, and challenges exporters by making their products more expensive in international markets. On the flip side, strength can also restrain inflation as the economy accelerates and should help lure capital to the U.S.

Falling Euro

The euro bought $1.1244 at 1:14 p.m. in New York today, heading for its sixth straight weekly decline against the U.S. currency after weakening 12 percent last year, the most since 2005.

Asked if the dollar is getting too strong, Lew distinguished between nations that loosen monetary policy for “domestic purposes,” and those that intervene “in ways that are designed to gain unfair advantage.”

“We have been very clear on a bilateral basis and on a multilateral basis that if countries do things that are unfair, we’re going to press hard,” he said, without naming countries.

Many delegates in Davos appeared inclined to see the threats a strong dollar poses to the world’s biggest economy.

“I’m a little more worried about the U.S. in the next quarter or so,” Larry Fink, the chief executive officer of BlackRock Inc., told Bloomberg Television yesterday. “Our companies are now being marginally harmed by the stronger dollar.”

Another Challenge

Cisco Systems Inc. CEO John Chambers said Friday that companies need to be innovative enough to overcome obstacles such as security challenges or a strengthening currency. The rising dollar is “one more challenge in front of us but a lot more opportunities,” he told Bloomberg TV’s Tom Keene in an interview.

The International Monetary Fund made the steepest cut to its global-growth outlook in three years this week, as diminished expectations almost everywhere except the U.S. more than offset the boost to growth from lower oil prices.

Carlyle Group LP co-founder David Rubenstein said earlier in the week that “the biggest problem in the United States is that the dollar could become very, very strong.”

It has surged in the past year as the U.S. economy gained momentum while Japan and the euro area slowed, fanning speculation the Fed will raise interest rates this year for the first time since 2006 as its counterparts ease monetary policy.

‘Chilling Effect’

“It will only get stronger if we raise rates,” Goldman Sachs Group Inc. President Gary Cohn said. “That will have a chilling effect on the U.S. economy.”

General Motors Co., the biggest U.S. carmaker, has already spotted a “huge increase” in the profitability of Japanese rivals “in the segments in which we compete,” GM President Daniel Ammann said in an interview,.

Asked about the potential impact on American exporters, Commerce Secretary Penny Pritzker said in Davos this week that the dollar’s rise is “something to keep an eye on.”

Lew may grow more concerned if policy makers begin actively seeking to weaken their exchange rates against the dollar, igniting so-called currency wars in which nations try to gain a competitive advantage over trade partners. Italian Prime Minister Matteo Renzi told the Wall Street Journal in Davos this week that “my dream is parity” between the euro and the dollar.

Not Polite

“It’s the conversation that it’s not polite to have,” said Ray Dalio, the hedge fund manager who runs the $160 billion Bridgewater Associates. “Policy makers can’t talk about changing the exchange rate. So the currency will be a bigger influence in the year ahead.”

Dalio predicted an early-1980s-style “short squeeze” in the dollar as debt denominated in the currency becomes more expensive for overseas borrowers to repay, prompting a dash for dollars.

Fink was less sure the dollar’s rise has further to go. If a slowing of the U.S. expansion forces the Fed to tighten monetary policy more slowly than investors now reckon then “the dollar’s not going to appreciate as much as some people think,” he said.

To contact the reporters on this story: Simon Kennedy in Paris at skennedy4@bloomberg.net; Andrew Mayeda in Washington at amayeda@bloomberg.net To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net Brendan Murray, Alister Bull

Bloomberg