Currency strategists at Scotia Capital note that there are a lot of US dollar bears at the market. The greenback is losing both versus the commodity currencies (Australian dollar reached 29-year maximum above 1.7000) and the safe havens (see the pair USD/CHF that renewed the absolute minimum at 0.8850).

The specialists say that the purchasing power parity analysis shows that some major currencies are significantly overbought: Aussie, for instance, is overvalued by 34%, Swiss franc – by 28%, euro – by 22% and the Canadian dollar – by 21%. According to Scotia Capital, this data should with no doubt be taken into account.

The analysts note, however, that currencies can trade at overvalued levels during some time, especially taking into account the Fed’s loose monetary policy and Standard & Poor's negative outlook for US debt.

As for the short term trade, the relative strength index (RSI) shows that no major currency is overvalued, so investors may keep selling dollar looking for its counterparts to set new highs.