The dollar posted its biggest gain against the Euro in almost eight years but that doesn't mean the U.S. currency won't continue to be plagued by the nation's slowing economy, widening budget, trade deficits, negative inflation and adjusted interest rates.

The greenback’s surge against the European currency this month was enough to prompt Bank of America Corp. to tell its customers to exit trades betting on more gains. Morgan Stanley still forecasts the greenback will approach a record low by October as the U.S. housing slump and credit-market losses keep the Federal Reserve from raising interest rates this year.

``I would not chase the dollar's strength versus the euro as the pair has moved beyond interest-rate support,'' said Sophia Drossos, a strategist in New York at Morgan Stanley, who also recommended closing out bets on the dollar versus the currencies of Malaysia and Singapore. ``The dollar is not out of the woods. It will take the market a while to come around to our point of view.'' The EUR/USD is currently trading at 1.5010 as of 11:59 am, GMT.

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