Credit Agricole’s month-end rebalancing model indicates that the dollar should be offered across the board, though the signal is a mild one. The gains in US equities during the August month is cited as the main driver, making for rebalancing flows that will lean back against the dollar slightly.
The firm notes that despite the firmer dollar during the month, equity strength adjusted for market cap and FX moves points to mild selling pressure. The strongest sell signal will be against the NOK but other G10 currencies are expected to just face slight dollar selling overall into the month-end fix.
From yesterday: Weak dollar selling the signal this month-end – Barclays
