The USD finished last week flat. Economists at TD Securities analyze Greenback’s outlook.

Use any USD rallies in the next few weeks as selling opportunities

We continue to like fading USD rallies, but factors show that global FX carry (and momentum) has offered better performance than taking USD directional views.

Our playbook this week underscores the importance of ‘good’ growth and ‘good’ inflation, where a combination of good growth data and disinflation is a poor mix for the USD. It resonates with the global Goldilocks scenario, where the USD smile calls for weakness.