The main thrust of our bullish US dollar outlook is the divergence in monetary policy trajectories. We do not think the divergence has peaked and anticipate it to persist through next year and into 2017. Since the Federal Reserve finished QE3, the divergence has been driven by easing of policy by the European Central Bank and the Bank of Japan, and a broad number of high and medium income countries, including China. We expect the Fed to participate in the divergence by raising rates. It has been particularly challenging this year to time the Fed's lift-off, but the vast majority of Fed officials still anticipate it taking place this ... (full story)
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