FXStreet (Mumbai) – The global economics team at Scotiabank believes the Fed is optimistic that effect of strong dollar on net exports should diminish over time.
Key Quotes
“The Fed is more optimistic about the fading of headwinds from the strong dollar and the drop in oil
prices as it impacted capex. Some of the headwinds restraining economic growth, including the effects of dollar appreciation on net exports and the effect of lower oil prices on capital spending, should diminish over time.”
“As a result, the FOMC expects U.S. GDP growth to strengthen over the remainder of this year and the unemployment rate to decline gradually.” The Fed sees a better H2 for growth, particularly as the dollar rally has moderated and the decline in oil-related capex should have moderated too.”
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