TD Research expects a USD short squeeze into year-end, expressing that via a short GBP/USD exposure as its ToTW for this week.
"Vaccine-related headlines remain a key source of optimism. The positive news of AstraZeneca and Oxford University's results completed the trifecta recently. The result has helped nudge risk assets forward. Yet we caution on extrapolating the upbeat tone into yearend, where think the realities on the ground are grimmer," TD notes.
"We continue to forecast a deeper USD pullback in the quarters ahead. Still, it's a choppy path. We expect a reflation squeeze over the next six weeks, reflecting the COVID winter, and associated mobility trends, positioning, valuation, and annual seasonal trends that benefit the USD," TD adds.