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2 Jun 2015
Dollar strength playing role in US downside - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained some of the factors that led to negative GDP growth in Q1 are no longer holding back the economy.
Key Quotes:
"The extreme winter, port strikes on the West Coast and the BEA’s problems with seasonal adjustment of the GDP series."
"However, other ‘transitory’ factors are still playing a role. The strong dollar remains a headwind for US exporters, and the low oil price has reduced the incentives to invest in the energy sector. What’s more, consumers are still hesitant to spend their windfall gains from cheaper energy."
"Therefore, we expect only a modest re-acceleration of the US economy in Q2, which should delay the Fed’s first rate hike to the final quarter of the year."
Key Quotes:
"The extreme winter, port strikes on the West Coast and the BEA’s problems with seasonal adjustment of the GDP series."
"However, other ‘transitory’ factors are still playing a role. The strong dollar remains a headwind for US exporters, and the low oil price has reduced the incentives to invest in the energy sector. What’s more, consumers are still hesitant to spend their windfall gains from cheaper energy."
"Therefore, we expect only a modest re-acceleration of the US economy in Q2, which should delay the Fed’s first rate hike to the final quarter of the year."