USD: Standing Ready To Fade Rallies

By TD via eFXNews

TD FX Strategy Research discusses the USD outlook and argues that its recent gains are likely to be short-lived on possible reversal into the US jobs report on Friday.

“The $ has staged a modest rebound in the past few days, rallying against most of the G10 low-yielders….The trading signal is quite weak and our top-down macro model only shows a 0.4% discount, so we don’t see a steep discount that is likely to get monetized quickly.

At the very least, this backdrop increases the sensitivity of G10FX to US data this week. A government shutdown is also another risk, leaving the nascent $ recovery sensitive to a pullback in NFP,” TD argues.