The USD has put on quite a show on the forex markets. It does not look like the rise of the dollar is over as well, although it did stomp on the brakes for a bit recently. In contrast with its European and Japanese counterparts, the US central bank will raise interest rates most likely throughout 2015.

A diverging monetary policy and a stronger dollar will be good news for European and Japanese stocks in the eyes of many analysts. The main indices will still perform well, but probably not as well as they did in 2014.

The Dollar Is On A Structural Rise

Despite the fact that the global economy is not really putting its best foot forward and that there is little wiggle room for policy changes, stocks remain the most profitable instrument (in comparison to bonds and cash). Double digit growth will be very tough to achieve in the coming year, however, for the non-active investor.

One of the changing trends is the structural rise of the dollar versus the euro and the yen, partly because of diverging monetary policy between the US on the one hand, and Europe and Japan on the other. The Fed has stopped injecting money into the system while the ECB and the BoJ are really only getting started.

The weaker euro is now supporting the profit growth of European companies. Every 10 percent in depreciation of the euro could push profit per share up by 10%, because a little over half of the revenue of European companies is generated outside of the EU. Continuing the expansive monetary policy of Europe could definitely be a great opportunity for stocks of companies in the region and the periphery.