UBS - "We remain long term bulls on the dollar. The US economy is set to grow by 2.3% in 2013 according to UBS, comfortably outperforming its peers. Diversification by US fund managers, foreign central banks and sovereign wealth funds - the world's three largest holders of dollar-denominiated capital - is likely to stay subdued, and America's shale oil boom is gathering pace. The main threat to our view comes from the Federal Reserve undertaking prolonged quantitative easing. But the latest minutes suggest its Open Market Committee is split on the merits of extended asset purchases.
Increased doubts from the Fed strengthen our conviction on the greenback. As the new year starts we think dollar bulls for now should focus still on selling the yen. Later in the year, there are likely to be better opportunities to short the euro and pound against the greenback."