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Halfway Through Dollar Rally; Stocks to Top in March: Charts

We are almost halfway through the dollar rally, Robin Griffiths from Cazenove Capital said Monday. Griffiths sees stock markets "topping" in March next year.

People have been trying to go for a rally in the dollar since October. Well, finally the trend has reversed and the U.S. currency has gained some and looks to gain more, Griffiths said.

His target for the dollar index is 81.

The rise in the dollar and subsequent falls in the euro, sterling and gold mean that "investors are taking risk off the table," Griffiths told CNBC.

"But the (overall) trend for the dollar is still negative," he added.

"Although equity markets are rangebound at the moment, they will, in fact, break out to the top of the range and go higher into early New Year," Griffiths predicted. "The rally won't last quite to May."

"We will rise now, gently, through the year end into the New Year and probably make a top in March," he said.

We have a "very steeply rising yield curve" on the 2-year Treasury Note, Griffiths noted.

"And one of the bets that would be right to put on between now and early in the New Year is a flattening yield curve," he said. "There's an incentive to move longer in the bond market to pick up yield."

"Yield is very important because you can get a lot better yield in some equities than you can get on Treasurys. And I think it is those equities who will be the ones that people will be interested in," he added.

Sectors where the yield is very high include oils, pharmaceuticals, telecommunications and tobacco, according to Griffiths.

Griffiths likes Deutsche Telekom in the telecom sector.

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