The question on most investors' minds is when will the USD peak and what are the catalysts? The USD could reinforce recent gains until the Fed pivots or growth elsewhere bounces back, economists at TD Securities report.

Stagflation risks easing but not out of the woods yet

“Most importantly, a peak in the USD will require a shift in global growth and a pause in Fed terminal rate pricing (we're at 5%).”

“While a Fed shift could stall the rally, a nadir in the global growth outlook is likely a more crucial signal to start leaning against the USD.”

“There are some early signs of stagflation risk peaking, but we think it will take a bit more pain before moving on to a new set of themes.”

“We don't expect Plaza 2.0 to reverse the USD, while sporadic FX intervention, ironically, works in its favor.”