• Renewed bullish tone in the US dollar (USD), approaching US monetary policy normalization, increasing caution within the emerging-market asset class, persistent official intervention in currency and securities markets, and directional shifts in commodity prices (particularly in the energy sector) remain critical drivers of capital flows and investor sentiment in global foreign exchange markets. 
• The global economy shows a divergent growth path, which is being reflected in uneven monetary policy actions. Global rebalancing forces remain present. The United States in the developed world and India in the developing world will likely lead the growth charts in 2015-16, despite signs of activity moderation in the first half of 2015. Sharp economic contraction in top-10 emerging-market economies like Brazil and Russia, coupled with gradual economic deceleration in China, will remain key factors delaying a period of higher and sustained global growth.
• The USD strengthened in the latter half of May, driven mainly by renewed confidence in the US growth outlook and the implications for actions taken by a data-dependent (not date-dependent) Federal Reserve (Fed). 
• Analysts from Scotiabank notes,"Our medium term forecast implies broad USD strength, with key policymakers reaffirming their preference for Phase 1 of monetary policy normalization to begin sometime in late 2015. The underlying fundamentals supporting the US consumer (labour market conditions, lower energy costs and ultra-low interest rates) remain in place."