My thesis for the first quarter of 2021 will be for USD to go higher. My main reasoning is higher 10Y treasury yield. Of course the Fed can do YCC to tame it down. My bet is as long as there is no material shock to the S&P, they will allow yield to drift higher, especially after Biden's massive fiscal plan. Let's assume it will pass in some shape, way and form.
My second reasoning is extreme positioning. Tom, Dick and Harry's brother in laws are short of USD. Normally, it reverses when the positioning is this extreme. I wouldn't even be surprised when ECB,BOJ are starting to jawbone their own currency.
As this is my first post, I keep it short and sweet. Any thoughts? feel free to chime in