Month end is right around the corner
The outperformance of US equities in June will lead to strong rebalancing flows today and Friday, according to models. The big moves have left foreign investors underhedged.
One model shows the strongest signal in selling USD/CAD. The weakest signal is in EUR/USD because of the similarly-strong performance in Eurozone equities. Yesterday the euro rallied into the fix.
Contrasting with the dollar-selling is the risk from the G20, which could outweigh any fixing moves. Risk aversion ahead of the meeting could also lead to flows into the US dollar, yen and Swiss franc.
