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A glance at the strong dollar and implications – BBH


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FXStreet (Guatemala) – Analysts at Brown Brothers Harriman touched on the implications of a strong dollar for the Fed.

Key Quotes:


“Listening to the Fed’s leadership and most of the regional presidents, the sense is not that the dollar’s appreciation has reached such proportions as to raise alarm.”


“Atlanta Fed President Lockhart, a centrist, expressed the views of many, that the strong dollar will have a slight drag on growth.”


“St. Louis Fed President Bullard, a hawk, offered a similar assessment: that the dollar’s strength does not pose a major impediment to growth.”


“The US is a large but relatively closed economy. It exports less than 15% of GDP. Much of its exports and imports are priced in dollars, further insulating the economy from the vagaries of the fluctuations of the foreign exchange market. Some of the dollar’s appreciation has been in anticipation of a Fed hike.”