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Dollar Index Will Rise Up to 10% by Year-End: Strategist
CNBC.com | June 30, 2011 | 05:51 AM EDT

Having shed more than 10 percent of its value against a basket of currencies in the past year, the fortunes of the U.S. dollar may start turning around soon, according to one analyst.

"I have a very strong belief that by the end of this year, the dollar will be much stronger than it is right now," Kathy Lien, Director of Currency Research at Global Forex Trading told CNBC on Thursday. Click here for full interview .

"I don't think come July 1st, we are going to see a vertical move higher immediately for the U.S. dollar," she said, referring to the Federal Reserve's second round of quantitative easing, which ends on Thursday.

Lien expects the dollar index to rise gradually between 7 and 10 percent by the end of the year, bolstered primarily by two factors.

Firstly, she believes the U.S. debt ceiling will be raised by August 2, a development that would be dollar positive. The Obama administration and U.S. lawmakers have been under pressure to raise the limit, currently capped at $14.3 billion, or risk the nation going into default.

Lien also expects the U.S. economy to continue strengthening for the rest of the year, which would prompt the Fed to begin a tightening cycle, further boosting the greenback.

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