THE AMERICAN DOLLAR keeps marching steadily upward on the world's exchanges. Most people don't pay much attention to it, but the effect is pervasive. Earlier in the year, the common explanation for this rise was the high interest rates in this country. But over the summer, when the rates fell, the dollar went higher than ever and created something of a temporary mystery.

The solution to the mystery is now pretty clear. Foreign money is pouring into the United States, sent here by people who are increasingly apprehensive about the outlook in their own countries. In addition to the surge of long-term investment by foreigners that began somewhat earlier, in recent months there's been a heavy flow of nervous money whose owners want to park it here safely while they see what happens next. The evidence suggests that a lot of it comes from Latin America.

The impact on the American economy is compounded by the simultaneous decline of the Japanese yen. Japan's position is, in some respects, the opposite of this country's. The Japanese inflation rate is close to zero, and the unemployment rate there remains astonishingly low. But economic growth is also low, and the Japanese government is frantically trying to pump it up with an easy-money policy. That has succeeded in setting off a very un- Japanese phenomenon, a capital flight that is now dragging down the currency.

Perhaps you noticed that the American trade deficit is widening. That's part of the process of adjustment. A high dollar brings certain benefits. It helps pull down inflation here, which in turn -- eventually -- means lower interest rates. Unfortunately, there are also consequences that are less welcome -- most particularly in raising unemployment here.

The dollar's exchange rate rarely seems to come up in the public discussions of inflation and employment. One reason may be that it's difficult for a country to manipulate exchange rates -- and extremely risky to try. But as the U.S. economy moves through the coming months, Americans need to keep it in mind that the international movement of money -- commonly unplanned and even unforeseen by governments -- will strongly influence the effectiveness of the country's intended policy.