The US dollar has already enjoyed an appreciable bid this month. In any event, the USD remains king of FX and it will be incredibly brave and naive – to assume otherwise, economists at TD Securities report.

USD flexing in places where it has not really done so yet

“There is no way around it, the Fed has an inflation problem on its hands and the USD will continue to remain king of FX.”

“Bounces in EUR/USD are a fade and will likely be short-lived.”

“EUR/USD parity will likely be more durable and contain broad USD variation, but it will eventually fail so a sub-parity paradigm is a very real risk.” 

“We think USD strength will spread to places where it has not flexed yet, like vs. the CAD.”