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May 28 - 09:55 AM

Barclays: Month-End Fixing Model Points to Strong USD Selling Signal into the Fix

By eFXdata  —  May 28 - 08:00 AM

Synopsis:

Barclays’ latest month-end fixing model forecasts significant USD selling pressure as the month concludes. This projection is based on recent market reactions to U.S. economic data and the resulting need for portfolio rebalancing.

Key Points:

  • Recent U.S. Data and Market Response: Slightly softer U.S. economic data in May, particularly PPI, CPI, and retail sales, have led to a rally in bonds and stocks reaching new highs.
  • Rebalancing Needs: These market movements are expected to trigger significant dollar-selling activities to rebalance portfolios by the end of the month.
  • Broad-Based Signal: According to Barclays' proprietary model, this strong dollar-selling indication is consistent across G10 currencies, influenced heavily by large market cap movements in U.S. equity markets.

Conclusion:

Barclays predicts a pronounced selling of USD at this month's end, primarily driven by rebalancing needs following recent shifts in U.S. market dynamics. This trend reflects broader adjustments within global financial portfolios.

Source:
Barclays Research/Market Commentary

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