Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Is The US Dollar Rally Over?

As we all know, May has been very good to the US Dollar. Since May 1st the US Dollar Index has gone from about 81.50 to a peak of nearly 84.50. In the past few days the Dollar has sold off rather hard so now market participants are beginning to wonder if the rally is over. The short answer to this is no. The Federal Reserve has been talking about tapering QE, which they may or may not do for quite some time, but the very fact that Federal Reserve members have been publically discussing the possibility is very bullish for the dollar. While everyone else is stepping up QE, the Fed is on the verge of cutting back. Looking at all the economic stats it is apparent the US is doing pretty well at the moment while many other nations are still in recession. The ECB will have to keep rates low for years to get out of the mess they are in, whereas the fed could start raising rates later in the year.

The one thing that concerns me about my view of the dollar is the fact that the core inflation rate in the US is low. I fully expect that to change though as we continue throughout the year...

Looking at the big picture, I think the US Dollar is in store for a multi-year rally so in my opinion this definitely isn't over.