Demand is still too hot.

I think the possibility of intervention is very small. Apart from the surge in the price of oil, Germany doesn't really have an inflation problem.

The euro zone economy is strong. The latest German purchasing managers' survey was at a record high.

It looks like any move by the Bank of Japan away from its zero-interest-rate policy has been pushed out even further into the future.

A rate hike is not by any means off the table. The Fed may decide to make an insurance move of one-quarter point in June.

The background news is favorable for the euro. The euro zone economy is bouncing back and the U.S. economy is slowing.

The euro will go still lower, but we are unlikely to see a repeat of the wholesale sell-off that occurred last week.

I think it's just really hangover from that. The issue of U.S. interest rates and where we're going has been a pretty important driver for the dollar.

The better economic story and the Fed tightening were the main drivers behind the dollar rally, but that has now run its course.