TD Research summarizes its favorite trade ideas for the month of April.
"One of the most vital emerging themes in FX is the breakdown in broad USD correlations. It paves the way for more relative value trades rather than a directional USD bias. After a solid Q1, we see the USD rally pausing this month, giving way to an improving global outlook," TD notes.
"In short, the USD runs at a premium on some of our tactical tools, overpopulated shorts have been mostly unwound, and it's now looking extended against a lift in ROW growth expectations. We recently added long exposure to NZDUSD and shorts in GBPCHF, EURNZD, and NOKSEK. If rates hold steady, risk rallies, and the USD participates, that's a tide that will lift all boats, regardless of what's happening on the local level...GBP looks vulnerable ahead of May's Scottish risk event," TD adds.