Strong sell for USD at the end of the month

Shares on the US market rose this month thanks to the rebound in market risks due to some decent corporate profits in the United States coupled with more stable global growth as well as the modest reduction in market fears about trade strain. The G10 shares are also stable. For FX operations, the dollar is slightly mixed. Overall, the stronger increase in US stocks, adjusted for market capitalization and currency efficiency, suggests that the worsening of the portfolio at the end of the month is likely to be strong.

How big portfolio managers are trading at the end of the month

The model is based on the concept that global portfolio managers have set reference values for currency hedging ratios, and as the value of their assets in their portfolio changes over the course of the month, managers will need to re-hedge their currency exposure to preserve currency your benchmark. Typically, these FX rebalancing flows are observed at the end of the month, and usually their impact is felt closest to the London fix on the last business day of the month. The change in capital market capitalization results of all G10 currencies is considered and adjusted for monthly exchange rate differences. This shows how the value of assets has changed over the course of the month and thus the degree of rebalancing of the portfolio. A signal is generated for all USD / G10 currency pairs that indicate the expected direction and the flow strength at the end of the month. Signal strength depends on the amount of capital / currency movements over the course of the month compared to previous history. The signal is on a scale of +5 to -5. A +5 signal indicates that end-of-month flows are expected to be highly positive, while -5 indicates that flows are heavily negative

Read more:

• AUDUSD: key levels where we are looking for short positions
• AUDUSD bounces off the resistance zone despite the positivism during the Asian hours
• EURUSD in a tight range during the Asian session
• EUR in a recovery mode, but vulnerable | Technical levels
• EURUSD continues ranging in the early EU session. NFP data in focus at 15:30