The Stalwart has an excellent post on the dollar. More specifically the post focuses on the perils of forecasting. While the probability of the dollar continuing to rise may be high, the ultimate payoff may not be there given the potential for a large fall in the dollar. In short, investors need to fully analyze the entire range of payoffs from any investment scenario.
The strength of the dollar has been a surprise to a whole host of analysts and investors. Andrew Busch in the Globe and Mail notes that global macro hedge funds had a poor October due in part to the strength of the dollar. He lists five reasons for the greenback’s resilience.