TD Research notes that market themes are still running around COVID and flags a scope for USD consolidation in the very near-term.
"COVID remains a dominant theme across global markets for better or worse. The recent developments have been somewhat supportive, especially as it relates to vaccines, treatments, immunity thresholds, and infection/mortality rates. While some of these factors vary across countries, COVID curves are mostly moving in the right direction," TD notes.
"The USD may have overshot COVID and other themes. That's the read we get on our other indicators and another reason to expect some modest consolidation in the very short-run, especially if it favors Trump. Alternatively, the market's focused on the US's weak starting base for a likely second wave this winter," TD adds.