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By Lucy O’Carroll, Chief Economist --- Investment Solutions, Aberdeen Asset Management
The strengthening US dollar is becoming a significant factor for global growth and our forecasts. The dollar has risen by 2.5% in trade weighted terms in the past month, and by more than 12% over the year, reflecting growing expectations of US rate increases. We remain positive overall about the advanced economies, forecasting G7 GDP* growth at 2.2% this year and 2.3% next (up from 1.6% in 2014). Robust US growth and a strong dollar are good news for them: US import volume growth firmed to over 5% in the year to January, while the dollar’s rise potentially boosts trade for other advanced countries in this expanding market. The picture is...
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