Synopsis:

TD Securities projects a downturn for the USD in the near-term, emphasizing a relative calm in risk events. A series of economic indicators, including payroll numbers, ISM data, and other economic reports, signal a moderation in the US economy's growth, spurring a rally in Treasuries and a decline in the USD's strength.

Key Points:

• Economic Data Indicating Slowdown: Recent data such as payrolls, ADP employment, JOLTS job openings, and durable goods orders collectively suggest an easing in the US economy's expansion pace.

• Bonds and Currencies React: These economic signs have sparked a significant rally in US Treasury bonds and catalyzed a depreciation of the USD, particularly benefiting risk-sensitive, high beta currencies.

• Shift in USD Dynamics: TD Securities identifies a clear regime shift for the USD, pointing towards a trend reversal from its previously robust position.

Conclusion:

TD Securities anticipates the 'USD lower' trend to persist, with fewer risk events to disrupt this movement. The observed moderation in key economic indicators underpins a notable regime change, hinting at a reversal of the USD's fortunes, with potentially far-reaching implications for global currency markets.