But crucially this would be a U.S. dollar rally powered on positive economic news and not based on a scenario of the world falling apart, which triggered the post-2007 increases. And that would be a big change in the dynamics of the forex market.
But the question is would this last? There's enough doubt to believe that it may not. The Eurozone's problems are deep with the southern periphery blighted by austerity induced mass unemployment. Also, is the U.S. economy really strong enough to stomach potentially higher commercial interest rates that would likely result from the phasing out of QE? It may not. U.S. growth, though stellar compared to most of the developed world, has been fairly lacklustre going by previous form.
The problem is that the developed world's populations are getting older and quite quickly. That means fiscal strains are going to increase. Advanced economies are largely driven by consumer demand, older consumers tend to spend less and this implies that developed economies are not going to rediscover strong economic growth any time soon.
Therefore, it would hardly be surprising if the Fed is forced back into doing more QE. And that might mean a return to a variation of the risk-on, risk-off rally as market cycles never quite repeat themselves in exactly the same way.