The Strong USD Is Negatively Impacting US Trade

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Exports have been a solid contributor to US GDP growth for the last few years, while consumption and residential investment have been more restrained.  Recently, with consumption firming and likely to improve further from the tail-wind of lower oil prices, and exports faltering, it appears the drivers of the US economy are trading places.

USD and Purchasing Power Parity

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We mentioned yesterday that the US dollar is again breaking out and that tends to be negative for most stocks around the world. Today, we thought we would continue to look at US dollar strength. The nominal trade-weighted dollar index by major currencies is again very close to breaking out to 11+ year highs.