Bank investors who are betting on higher rates may want to leave the tables for a while. Bank analyst Dick Bove says the Fed won't dare raise rates with the dollar this strong.

“Expectations that the Fed will raise rates in September or even June are off the mark,” said Bove, equity research analyst at Rafferty Capital Markets. “The dollar is simply too strong. It’s having a significant impact on the earnings of international companies across the board and it’s having an impact on the trade balance."

If the Fed were to raise rates, Bove believes the downward spiral would be severe. “Trade balance would grow more negative, international companies would lose money overseas, jobs would be lost in the U.S. and the growth of the economy in the U.S. would slow down." Bove said all those scenarios are just too threatening given the fragile state of the recovery.

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Therefore he thinks the Fed will feel compelled to err on the side of caution and keep rates low. And Bove added, the Fed never thought it would have to keep rates so low for so long. “They thought they could turn this on and off like a water spigot.

"They never anticipated this. It’s a black swan event,” he said, meaning the prolonged period of low rates is unprecedented and therefore ripples are difficult to predict. “We need to have an accord where central banks come together and make a decision where their currency values should be,” Bove said. “The situation at the present time is not good.”

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