From TD FX Strategy Research
TD FX Strategy Research notes that last Friday's US retail sales and CPI miss took some steam out of the USD, and recommends using dips as tactical buying opportunities near-term.
"This reflects the scope for the greenback to play catch-up with US rates, scope for US data surprises to start to recover as we lurch toward the bottom-end of the range and the prospects for continued focus on the prospects of some commodities currencies to persist," TD argues.
In particular, TD recommends buying USD dips against GBP around current levels into 1.29.
"We look for a softer retail sales headline, which is likely to leave sterling vulnerable near-term as it has decoupled notably from cyclical drivers. With much of the good news around Brexit priced in and the data starting to turn lower, we remain sellers of GBP," TD adds.
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