According to FX-Team Bank Of America, there are several reasons why the dollar may rise in the future - based on AMarkets.
The three main reasons for the USD-optimism - 1) reducing the number of long positions on the dollar in the market; 2) the probability that other central banks will conduct an active monetary easing in the near future; 3) strong fundamentals in the US economy.
Interestingly, the amount of long positions on the dollar in recent weeks has decreased to a level that took place in the middle of last year, before the start of the next round of dollar rally. Number of long positions is still larger number of short, however, a two-year average - at least since July 2015.
Schedule - reducing the number of long positions on the dollar:
BoFa Economists expect US macroeconomic indicators will continue to grow in 2015 and 2016. Unemployment has all chances to fall to 4.8% by the end of 2016. Another factor in favor of the strengthening of USD - Feda action to delay raising rates will stimulate the ECB and the Bank of Japan to go to even greater incentives in the near future.
Interestingly, the experts BoFa predict the Fed will soon launch another round of easing, which will last until September 2016. The choice in favor of tightening - raising rates in this or early next year - a little obvious.Since such a step would lead to big trouble in the context of the dynamics of inflation and commodity prices.