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May 28 - 10:55 AM

Credit Agricole: Month-End Fixing Model Predicts USD Selling, Strongest Signal is Short USD/JPY

By eFXdata  —  May 28 - 09:15 AM

Synopsis:

Credit Agricole's month-end fixing model suggests moderate USD selling across various currencies due to May's equity and FX market performances. The most significant selling pressure is expected against the Japanese yen.

Key Points:

  • Equity Market Performance: Global equity markets showed an overall improvement in May, influencing FX dynamics.
  • USD Performance: The USD experienced general weakness throughout the month, aligning with the trends seen in equity markets.
  • Rebalancing Flows: Adjustments for market capitalization and the month's FX performance indicate that portfolio rebalancing will likely involve moderate USD selling.
  • Strongest Sell Signal: The model identifies the strongest sell signal against the JPY, indicating a notable shift in USD/JPY positioning.

Conclusion:

According to Credit Agricole's predictions, the end of May will witness targeted USD selling, particularly against the JPY, as markets adjust to recent movements in global equity and FX markets. This rebalancing reflects broader market trends and investor strategies for the month.

Source:
Crédit Agricole Research/Market Commentary

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