If you have been marveling at the dollar's recent strength — and perhaps starting to wonder how far it can run — wonder no more.
The currency strategists at Bank of New York Mellon are pointing out some trends that explain much of the dollar's rise.
Neil Mellor points out that while although real money investors like pension funds have been participating in the
Then there is the matter of the improving U.S. economy, evident in the latest
An improving economy "can only encourage nervy questions about the market's long-term dependency upon the Fed's 'punch bowl,'" or
Samarjit Shankar has analyzed investment flows, and he said that overall, investors attitudes toward the dollar seem to be shifting and becoming more positive.
"The U.S. dollar remains in favor, having been net bought for seven consecutive days," he wrote in a note to clients on Wednesday. "Strong activity numbers will help maintain investor expectations that the U.S. economic recovery is best placed amongst G-3 to begin gaining traction this year."