TD Research discusses the USD outlook and sees a scope for further USD strength in the near-term but maintains a bearish bias over the medium-term (3-6 months).

"What a difference a few weeks make. While we expected a USD consolidation through Q1, the magnitude (and potential duration) has been a surprise. The USD is now flat on the year. The chief discussion point is whether the world is going through a positive growth shock that requires higher rates or sliding back into the depths of 2022," TD notes.

"We hold the weak USD thesis for the next 3-6 months, as the USD still weakens on a mix of higher rates and better global growth. Yet, a stronger USD remains the path of least resistance in the near term, underscoring the uncertainties of the next market regime. We prefer RV trades where a long EURCHF, AUDCNH, and short CHFMXN bias capture other market themes," TD adds.