Why Financial Giant MF Global is Bullish on the USD

MF Global's foreign exchange analyst Jessica Hoversen appeared on Bloomberg TV on Wednesday. In her appearance, she predicted a bull-run for the U.S. dollar, picking up major momentum in the fourth quarter.

Hoversen based her prediction on surging U.S. economic growth, particularly in the fourth quarter of 2011. Hoversen also cited an end to QE2 this month and a forthcoming congressional agreement to raise the debt ceiling as catalysts for an appreciating dollar.

When questioned about the possibility of QE3, Hoversen dismissed the notion, claiming that lack of political support would prevent the Federal Reserve from engaging in further balance sheet expansion.

Hoversen predicted that non-farm pay-roll numbers would disappoint, but put the blame on weak numbers on supply-chain disruption in Japan and poor weather in the United States.

Traders who believe Hoversen's thesis might consider PowerShares DB US Dollar Bullish Index (NYSE: UUP). UUP attempts to return a value corresponding to the general strength of the US dollar and might do well if the dollar is appreciating.