What is the outlook for EUR/USD and GBP/USD at month’s end?
Here is their view, courtesy of eFXdata:
The preliminary output of this month-end fixing model point to USD selling against EUR and GBP at month end, according to data from Citi Research.
“The preliminary estimate of month-end FX hedge rebalancing flows points to a net USD selling need on Monday, 31 August, Citi notes.
“The relative outperformance of US assets has likely left foreign investors under-hedged, giving a net USD sell-signal to increase hedges. This foreign rebalancing need is estimated to be -14bp of global passive index-following assets, -12bp of which are made up of equities…The FX impact suggests USD selling against EUR and GBP at month end,” Citi adds.
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