TD Research discusses the USD outlook in October and likes relative-value trades in the near-term.
"We think a fine line exists between stagflation and reflation, underscoring a nice setup for relative value trades rather than a straight-line USD view this month. However, we also note that USD signals read stretched once again while market pessimism runs deep," TD notes.
As a result, the USD looks vulnerable through October even if the funders underperform. October seasonal trends works against the USD too," TD adds.