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Month-End FX Models See Strong USD Buying Signals


Heading into the January close, a few sell-side write-ups for month-end FX rebalancing:

  • Barclays write that their model points to strong USD buying vs. All other majors, with the signal unchanged from their preliminary run. The sell-off across global bond and US equity markets has driven their model toward strong USD buying.
  • Citi's final model sees an above-average need to sell G10 and buy USD. Their model is unchanged vs. Prelim run. Their signal sits at 2.2 SD across G10, meaning this month's USD buy signal is the strongest since the Global Financial Crisis. Nonetheless, their flow indicators show real money USD buying as having been particularly strong last week, meaning some month-end flow may have already taken place.

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