TD is looking for the US dollar to fall further.
Analysts at the bank say that after the most recent "positive" inflation report, the USD experienced a dramatic slide. And say that since the positioning-driven surge in May, they have been recommending USD shorts, and believe the current price movement is only the beginning of a more extensive bearish turn in H2.
TD says that most medium-term factors:
- including volatility and valuation mechanics,
- front-end rate momentum
- relative central bank policy,
- and global growth and yield curve dynamics
are working against the USD, and thus support their view that the dollar has significant potential to decline through H2 and perhaps even through most of 2024.
