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The Case for a Stronger Dollar
Let's see: we've got quantitative easing, low interest rates, and lackluster growth. What could possibly make the dollar rise? John Shin has some ideas. Shin, a currency strategist at Bank of America Merrill Lynch, has been looking for both short-term and longer-term factors that could take the dollar higher, and he has found that they all tie back to the trade balance. For starters, Shin cites is the payroll tax. BofA economists expect the elimination of the payroll tax cut to put a dent in consumer spending. And while that will curb demand for U.S. goods, Shin says it usually has double the effect on imports. So ... (full story)