Future of US dollar looks strong

The dollar has been trapped in a downward spiral for more than 10 years, but there are signs that the currency may be throwing off its pariah status. The dollar was the second-weakest performing G10 currency in 2012 after the yen, weighed down by the Federal Reserve's huge quantitative easing (QE) programme. That helped to extend the bear trend within which the dollar has been trapped since 2002. But so far this year it has been a different story, with the dollar rising 3% on a trade-weighted basis as expectations have risen that that the Fed will start to rein in, or taper, its asset purchase programme and eventually begin to start raising interest rates as the US economy improves