The market has overreacted, and we still think the Fed's going to keep going to 5 percent next year. Plus, we don't believe the ECB will raise rates very dramatically, and nothing like the Fed.
The U.S. economy will continue to cruise along at a good speed so there's still going to be another two rate increases. We're dollar bulls and we're looking for opportunities to buy the dollar.
Interestingly the BOJ hasn't intervened where it last intervened and that confirms our view that they haven't drawn a line in the sand and they want to slow the pace of appreciation.
Everything is trading off equities now. European investors are buying less U.S. assets and it's enough to put pressure on the dollar because of the current account deficit.
At half a percent, that's still the cheapest funding in the world.
