The US dollar is still the hottest currency on the block.

Traders increased their bearish bets on the euro -- the greenback's main rival -- to their highest level since early December 2016, according to Rabobank emerging market FX strategist Piotr Matys.

Essentially, the eurozone continues to underperform the US economy by a mile and the interest rate differential is skewed firmly in favor of the dollar," Matys said.

Although the Federal Reserve seems to be at the end of its tightening cycle, with interest rates in the range of 2.25%-2.5% and no more increases expected for this year, things look different for the European Central Bank.

The ECB hasn't raised rates since it cut them to record lows to combat the European sovereign debt crisis. While market participants initially expected a hike in summer of 2019, the central bank said it would keep rates at ultra-low levels through the end of 2019 -- after Draghi steps down as president.

All this leaves the dollar more attractive than the euro.

Throughout 2018, the dollar benefited from a sentiment that even in case of a trade war or global slowdown, the dollar would be the least worst off.

Last week, ECB President Mario Draghi reiterated his cautious outlook on eurozone growth, saying the outlook was still skewed to the downside thanks to geopolitical factors, a threat from protectionism and vulnerable emerging markets. The currency bloc's economy is expected to grow only 1.1% this year