BofA Merrill: Who’s afraid of the dollar?

“The dollar continues to grow, adding already 7% from the end of June. Despite the fact that economists and Fed officials are concerned that the strengthening currency could harm the economy, this trend should be seen in context.

The current rise USD, probably does not represent a serious risk to the economic growth the United States, but its continuation may eventually affect the business, especially if expectations about the future trajectory of the “green” crawl up. In addition, if the dollar starts to rise for reasons other than strengthening economic indicators, for example, in the case of a “flight to quality”, due to a dramatic deterioration of the situation of foreign economies.

To date, the fears associated with the growth of “green” – are somewhat exaggerated. For a large, relatively closed economy such as the United States, strengthening currency, expressed only a single digit, should not be a cause for undue concern.

We are convinced that the lagging sector of the American economy, in particular the capital costs for companies, consumer durables and housing are key to economic recovery. Once they get into the spotlight, it becomes clear that exports – is not of paramount importance. “- Experts are convinced BofA.