Saxo Bank's John J. Hardy says a withdrawal from quantitative easing in the US, a new Fed chairman on the way and the looming German elections could lead to a dramatic return of volatility by year-end.

Solid USD gains at the start of the year were replaced in Q2 and early Q3 with wild indecision. Now, the currency should send a clearer signal of its intent to rally as the Fed asset purchase taper begins, though US and global growth worries remain.