The reasons for a dollar strengthening to continue is based on the simple case of monetary policy differentials and interest rate spreads. The dollar over the last year has been mostly range-bound but with more consistency of the view that rates will rise and the ECB in a loosening mode, the dollar has taken off. The result of a dollar rally is being felt across all global markets with EM selling off, the euro falling, and the yen plunging. The dollar may have gotten ahead of itself but the economics are all pointing in the same direction.
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