Against the tide: Will the dollar rally persist?

The greenback revival, driven by ECB recognition that the eurozone is faltering, will be sustained by the narrowing of the US current account deficit, the fall in the oil price and the US pursuit of a soft monetary policy.

Last month I ended by saying that I expected the euro and the yen to continue to appreciate against the US dollar. Well, it was not long after that the greenback began a big rally against other major trading currencies. Rather than eat my words, I want to explain what this means and whether the dollar revival will last.

My key global investment theme has been that the credit crunch would cause credit to contract, causing global recession.

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