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TD Securities keeps bearish dollar view despite hawkish Jackson Hole reaction

The firm expects a September Fed hold as incoming US data point that way, with the broader USD trend seen weaker into year-end.

FXStreet reports TD Securities’ macro team, led by Jayati Bharadwaj, Howard Du and Linda Cheng, is maintaining a bearish bias on the US dollar even after markets reacted hawkishly to Chair Warsh’s Jackson Hole speech.

The team argues incoming US data should steer the Fed toward a September hold rather than a rate hike, and it expects the broader USD trend to be weaker into year-end as midterm election scenarios and macro fundamentals drive FX.

TD Securities says election-related outcomes could change the dollar’s near-term trading, with gridlock expected to push USD modestly weaker to neutral, while a “Blue Wave” could trigger a knee-jerk USD strength move.

It also flags that a more durable USD rebound would require clearer policy follow-through and renewed upside surprises in US data, while a Republican scenario retaining full Congress control is viewed as the most bearish for the dollar.

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