US Dollar: Q3 uptrend seen intact – TD Securities
TD Securities’ macro team, led by Jayati Bharadwaj and colleagues, argues that recent Dollar weakness after the July FOMC is a short-lived retracement within a broader Q3 2026 USD uptrend.
TD Securities' macro division, spearheaded by Jayati Bharadwaj and her team, maintains that the recent weakness in the US Dollar following the July FOMC is merely a transient retracement within a more extensive Q3 2026 upward trend for the Dollar. They attribute this bullish outlook to hawkish speeches from dissenting Fed members and centrist members gradually adopting a hawkish stance.
The team's MRSI model has started to lean more bearish, yet it has not yet signaled a structural downtrend for the Dollar. The team posits that the post-FOMC USD selloff is likely to be short-lived, with the July FOMC seeing three hawkish dissents supporting a potential rate hike. They view the latest USD movement as a temporary pullback rather than the onset of a new USD downtrend, anticipating hawkish pushback from other Fed members to curb further USD weakness.
The analysts suggest positioning short out-of-money EUR/USD calls for the summer to capitalize on near-term USD consolidation or a resumption of the USD uptrend. They emphasize that the current move is more akin to a short-term retracement than the formation of a new USD downtrend, and they prefer to wait for sufficient evidence from US data to sway the rest of the Fed committee toward an extended rate hold.
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