Last month we asked, Will April be the cruelest month for dollar longs? and alas it was. The dollar reached record lows against the euro and traded at 2.0000 against sterling for the first time since 1992. But the question going forward is will this rout continue? The bear case is well known. Collapse of housing leads to slowdown in consumer spending and an eventual contraction in the overall economy. Indeed the GDP for Q1 printed at woeful 1.3%. But the US economy has shown remarkable resiliency, generating jobs despite the problems in the housing sector and as long as employment holds up, dollars problems may be contained.