This article in The Economist discusses the plight of the U.S. dollar. Near the end of the article, the two horns of the dilemma are delineated: currency weakness/quantitative easing or rapidly rising interest rates. It comes down to supply and demand. If the world is flooded with dollars from easing, the dollar will stay weak. But if the easing stops, interest rates will shoot up.
This pretty much reflects the consensus view of the dollar. Everyone is bearish now, as if dollar weakness was a foregone conclusion. I don’t know how everything will settle out, but I do know that lots of things happen in markets that finance textbooks say are impossible. It might be wiser to give your portfolio a large amount of tactical flexibility to respond to surprising developments, as opposed to locking yourself into one view.
Very Very wise advice!