The bullish case for the USD rests on the relative strength of the recovery

Bloomberg: “Although growth in output and unemployment slowed during the first quarter, the committee continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace,” the Fed said. The Fed repeated it will raise rates when it sees further labor-market improvement and is “reasonably confident” inflation will move back to its 2 percent goal over time.” Our view: The bullish argument for the Dollar rests on the predominance of the USA’s recovery relative, to Europe in particular but, just about every other major economy. However we also know that the Dollar’s rally has already achieved much of the tightening that might have occurred by raising interest rates.