Societe Generale Research sees the USD close to its peak over the coming weeks.
"Friday suggested that markets are surprised by even the slightest suspicion that the Fed could be less hawkish. The yen’s bounce suggests that the market needs a constant diet of rising US yields to drive USD/JPY higher and higher. The China-sensitive currency universe though, seems vulnerable until the Chinese economic outlook changes. The European data are holding up better than they might thanks to energy support, but not well, and anyway, the tail risk confuses things," SocGen notes.
"Overall, we’re closer to peak US yields and peak dollar, but if you want to know how to time the turn with confidence, you need to understand market psychology. The last stage of the dollar market will see more big moves than direction," SocGen adds.