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Barclays See Strong Equity Rally Prompt USD Sell Signal Into Month-End

USD
Early look at FX month-end rebalancing ahead of the festive season - Dec equity rally makes for a strong USD sell signal:
  • Barclays write that their model shows strong USD selling against all majors. They note that the signal is borderline 'strong' for all pairs, but still weaker than last month.
  • The signal is driven mainly by the continuation of the significant rally in the global equity and bonds markets on the month, especially after the dovish Fed meeting.
  • They note that the large market cap in US equity markets has dominated hedging flows, prompting the strong dollar selling signal across majors.
  • As always, they conclude by stating that trading earlier (a few days before month-end) improves the model's performance.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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