An increasing number of top investors are betting on the dollar, feeling that the euro, pound, and yen in particular are over-valued. Dodge and Cox, perhaps the best-regarded large mutual fund family, this week chose to hedge its currency exposure in its main International fund.

The worst is over. It will rebound in the next 6 months.

This is not a long term opinion. The dollar corrected after its big run up (see the UUP chart) and does not appear to be ready to dip down further at the moment. The price of Gold is still not strengthening as much as some have predicted (they're not wrong, just early :-) When Gold begins another move up, it will be time to sell the dollar.

The dollar is trading at lows that are forcing long-term capital allocation decisions to go towards the US. In fact more small public companies are planning to move operations to the US in the next 12 to 18 months. A great way to play the dollar and get underlying growth is to buy shares of US technology companies. Higher costs are making technology a better investment, valuations are low and many of the larger firms have substantial international exposure. So the asset value will increase with the dollar, and sales benefit from stronger non-dollar currencies in the meantime.