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Dollar rally has long way to go

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Dollar index rises

The dollar is flexing its muscles on the prospect of higher U.S. interest rates, and it may be only half way through a dramatic move that is jarring global currency, bond, commodity and stock markets.

The dollar index touched a new 12-year high Tuesday, and is now up 3.3 percent for the month of March. The yen slid against the greenback and the euro waffled, edging closer to parity at $1.07 against the dollar. Emerging market currencies also sold off, with the Mexican peso plumbing a new all-time low.

The strengthening dollar leaves plenty of losers in its path, including oil and other commodity markets, emerging markets and potentially even the U.S. stock market, vulnerable to the strong dollar's impact on corporate earnings. Gold, for instance, was near its lows of the year Tuesday, at $1,159 per ounce.

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