Will a stronger dollar negate the need for rate rises?

A strong dollar tends to foreshadow bad tidings in the global economy. From high yield, to emerging markets and even US interest rates, no corner may be spared the effects.

While a strengthening dollar is not all bad, managers should be warned against ignoring the lessons of history. On the positive side, a stronger dollar could end up doing the heavy lifting for the Federal Reserve in terms of policy tightening, and may negate the need for an interest rate increase next year. Broadly speaking, a rise in the currency is also good for the US consumer and corporate sector. Consumers have benefited by an estimated $376m a day from the associated drop in the oil price, according to 13D Research, although we are mindful that falling oil prices also pose a ...