Dollar seen shaving less U.S. growth in second half: BAML

NEW YORK (Reuters) - The strong U.S. dollar is expected to slice U.S. economic growth with less severity in the second half of 2015 than the first half, Bank of America Merrill Lynch analysts said on Friday.

The dollar's appreciation, which has hurt U.S. exports, likely reduced gross domestic product by 0.5 percentage point to 1.0 percentage point on an annualized basis in the first six months.

The drag from a greenback that has risen 20 percent on a trade-weighted basis since 2014 will likely shave GDP by 0.3 percentage point in the latter half of the year, the BAML analysts said.

"Clearly, trade has been and will continue to be a serious headwind to growth," BAML North America economist Emanuella Enenajor, currency strategist Adarsh Sinha and rates strategist Yang Chen wrote in a research note.

On Friday, the government said U.S. exports grew at an annualized 5.1 percent in the second quarter, a tad weaker than the 5.2 percent pace it last reported. Exports contracted by 6.0 percent in the first quarter.

While a strong dollar has lowered exports and might delay the timing of when the Federal Reserve will raise interest rates, the BAML analysts said "the U.S. economy is weathering the storm."

They noted a stronger dollar helps companies with high import costs and the overall economy with cheaper energy imports.

(Reporting by Richard Leong; Editing by Frances Kerry)

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