Much of the market is bullish about the U.S. dollar in the next year but the currency may well surprise on the downside, according to an analyst.
Oil prices, on the other hand, may bounce back as the current slump is largely due to the ongoing El Nino weather phenomenon that is causing a milder than usual winter, said Mark Jolley, equity strategist at CCB International Securities in Hong Kong.
"One of the things people are forgetting is that every single listed company that has U.S. dollar debt is paying down that debt at the moment so I think that's causing a lot of weakness in the currency," Jolley told CNBC's Squawk Box on Thursday.
The market is also factoring "too much" dollar strength, which may disappoint once crude oil show some upside, he said. Dollar-denominated commodities often move in the opposite direction to the greenback.
"One of the reasons why oil prices have been so weak is the weather. It also means that a lot of weakness we've seen in the oil price at the moment is seasonal; it's going to come out," he said.
"I think oil prices are bottoming here, I think oil stocks look interesting," added Jolley.