Credit Agricole says that its month-end fixing model is pointing to mild dollar buying into the June fix. The firm notes that:
“Global equity markets were broadly firmer in June. In FX, the USD has outperformed across the board on the month.
Overall, the moves in equity markets, when adjusted for market capitalisation and FX performance this month, suggest month-end portfolio-rebalancing flows are likely to be mild USD buying across the board with the strongest buy signal in the case of the USD vs the SEK.”
Just be wary that it isn’t just month-end flows that will factor into the equation this time. Quarter-end and half-year flows may also be part and parcel of that. As such, it is best to stay prudent with price movements perhaps seeing more chop and volatility as the flows may muddy the picture.
That especially when we move closer to the London fix on the final day or two next week. So, just take a bit of precaution if you do see some price jumps that may not make too much sense during this period.
