USD: upticks remain a sell – TDS

FX Strategists at TD Securities recommended selling USD on any bullish attempts.

Key Quotes

“A slower Fed hiking path, an unwind of the Trump trade, and less upward pressure from global rates should keep Treasury yields rising at a more modest pace. We nevertheless continue to see some upward pressure on rates as the Fed announces balance sheet runoff in September while continuing to deliver hikes in the coming months”.

“The greenback looks stretched on a few different measures, but political dysfunction, a gentle Fed cycle and global growth momentum favor only modest drawdowns in the major G10 currencies. While we expect a tactical squeeze in G10 into late Q3, we look to fade any USD rebounds. We favor buying undervalued currencies (mostly European), as the growth convergence triggers a regime change in FX”.