Overwhelming strength of the US dollar against was seen in the year 2015. Looking back, the dollar index gained around 7.69 percent during the last 12 months from 91.89 in January of 2015. Are we now at the end of the USD bulls run? Below mentioned are some reasons supporting the argument:

1) Historical data has shown that the US Dollar initially rises but then weakens once the Fed starts to hike rates. Hence the Fed tightening cycle will likely see the USD weaken not strengthen. In addition, further U.S. rate increases would be gradual because of the concerns about persistently low inflation and USD will retain a very dovish tone in 2016

2) The European Central Bank faces constraints on how much further it can expand QE, thus limiting its ability to engineer a weaker EUR. The risk of a higher EUR will weigh on USD strength.

3) Like the ECB, the BoJ's QE program is reaching its limit, and further expansions of QE are unlikely in 2016. The central bank may move to a rates-based policy framework in 2016. Given the BoJ's focus on the new (and higher) core inflation measure, we see waning pressure for additional easing in 2016.