Rabobank: US productivity strength to support dollar, but global recovery to limit upside

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The U.S. dollar could continue to draw strength from the country’s productivity advantage, which has been a central driver of its performance since the 2008 global financial crisis, Rabobank’s Jane Foley said in a note on Tuesday:productivity gains fuel wealth creationalso act as a strong offset to inflation risksthe U.S. economy’s heavy concentration of technology companies supports long-term competitiveness despite concerns over lofty valuationsFoley said the U.S. remains better positioned than most major economies to generate sustained productivity growth, helping underpin the dollar even as inflation pressures moderate. But cautioned that further appreciation is likely to be measured, as other regions show signs of economic renewalJapan’s emergence from deflationAfrica’s resource wealthGermany’s planned fiscal stimulusa trend of central banks increasing gold holdings as potential diversifiers that could temper demand for U.S. assets and slow the dollar’s ascent. This article was written by Eamonn Sheridan at investinglive.com.