The US dollar will follow a strongly bullish path in 2015, similar to that encountered after 1997, according to technical strategists at BofA Merrill Lynch Global Research.
MacNeil Curry and Stephen Suttmeier say that the US Dollar Index (DXY) has just broken out from a 10-year range. Projecting this breakout upwards gives a target of 106, to be reached over the next few years.
This outlook is supported by price action in the equity markets. The relative performance of the MSCI United States Index (US) versus the MSCI World ex-US Index (Rest of World) has broken out to new highs and Curry and Suttmeier expect this trend to continue into 2015. This, they say, will be bullish for the US dollar.
Interestingly, this US vs ROW breakout is similar to one that occurred in 1997, which also coincided with a big breakout in the DXY.