Why does a stronger currency have a tightening effect on economic conditions? http://www.economist.com/blogs/buttonwood/2015/12/central-bank-predictability


  Ever since 1987, banks have been willing to cut rates when markets
  have wobbled. Driving down bond yields has been an explicit aim of QE
  (and pushing up stockmarkets an implicit one). Currencies move in
  anticipation of interest rate divergence (hence the strength of the
  dollar this year) and a stronger/weaker currency has a
  tightening/easing effect on economic conditions.


A related question is what exactly is meant by tightening effect on economic conditions. This term is meant loosely in financial media and I do not know exactly what it means.
Tight monetary policy reduces the amount of money available in the economy and strengthens the currency. It is usually implemented by raising interest rates, increasing capital requirements for banks, or sometimes selling government bonds.

When there is less money and credit to go around, business activity slows down, economic growth slows down. Businesses that could have expanded by taking out loans do not do so; consumers who could have purchased more with their credit cards can't do so; investors who could have invested more money into businesses (equities) put the money into government bonds.