Analysts: U.S. rebound in sight, expect further upside for dollar

In their recent report, Nomura analysts say recent data suggests that U.S. economy may be gaining momentum, however, a stronger dollar and a drag from the energy center could test the recovery.

“Beyond Q2, as the drag from less oil and gas drilling activity and inventory adjustment dissipates, we expect growth to return to 2.5-3.0% in the second half of 2015 before gradually transitioning toward potential GDP (~2%) over the course of 2016.”

The analysts say they also expect inflation to “reenter positive territory” this in the second quarter, and accelerate in the second half of the year.

Currency analysts at BNP Paribas are bullish on the greenback, linking their view to economic fundamentals.

“May’s retail sales report on Thursday will be the key release of the week and our economists suggest that a number of factors argue for a strong reading. We remain positioned for further USD upside…”