Although explanations differ, strategists say it has to do with how the U.S. economy looks when compared with the dour outlook in places like Japan, Europe and China.
The 12-nation euro zone "is perilously close to outright deflation and another recession," Gluskin Sheff's Rosenberg said. "Wage stagnation in the U.K. for the first time in five years is causing a reassessment" of the Bank of England's monetary policy, he said.
Meanwhile, "Japan has not emerged unscathed from the April sales tax shock, [with] China slowing down far more than expected and property prices deflating for four months running."
Steven Englander, chief FX strategist at Citigroup, said last week that the outsized move in the currency market might have to do with the harmful impact of higher interest rates on other economies. The move, he wrote in a research note to clients, "may be explained by the benign implications of the Fed's indicated fed funds path for the U.S. and the not-so-benign implications for other countries."
Nomura's Nordvig says the dollar is sniffing out higher interest rates and leading the way for other financial markets.
"I think the FX market is looking ahead, and seeing a dollar which is in structural recovery, and which will eventually get support from rate hikes," he said, even if the timing of tighter monetary policy is uncertain. That would match the greenback's historical tendency to foreshadow tighter Fed monetary policy.
"The dollar tends to move about six to nine months before the first rate hike by the Fed," Nordvig added. "We are in that period now, and it fits with dollar dynamics in the past three tightening cycles."
The upshot is that the world's largest economy is stronger than its major counterparts, and that eventually will translate into higher rates. Although analysts are divided about whether the dollar is reflecting out performance of the economy, or whether it's pricing in higher interest rates faster than other markets, most agree that these gains are likely here to stay.
"The Fed exit from [bond buying] and zero interest rate policy will be so contrasting from the need for further easing in Japan, Europe and China that even if it doesn't go in a straight line, the dollar should be able to move higher, said Kit Juckes, head of foreign exchange research at Societe Generale.