NY Fed Says 10% Rise in USD Cuts GDP by 0.5%

A 10 percent increase in the dollar in a quarter would reduce U.S. economic growth by half a percentage point over a year and by another 0.2 point the following year, according to a New York Federal Reserve blog post on Friday.

The greenback has gained 12 percent against other major currencies since mid-2014 on improving jobs conditions and in anticipation of a Federal Reserve rate increase by late 2015.

This has raised worries among Fed officials and economists about the impact of a sturdier dollar on U.S. exports.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza