I think the dollar will try the upside if the data are good, but I don't think it will find momentum.

It seems the U.S. housing markets remain overheated. This will give the Fed another reason to keep raising rates, supporting the dollar.

Japan's interest rates are still low. The rate- differential story still attracts Japanese investors to higher yielding assets.

There's more upside risk on the dollar as the rate differential still attracts buyers. The U.S. economy is on a firm footing and the Fed may raise rates at least twice by March.

Fed officials' comments point to the risk of faster inflation. We expect three or four more rate hikes this year.

Bonds will probably edge higher following a plunge in U.S. equities and gains in Treasuries. Bonds will take their cue from stocks.