Credit Agricole's month-end fixing model points to a moderate inclination for USD buying as September comes to a close. This projection is based on recent downward trends in global equity markets and the USD's across-the-board outperformance this month. The most pronounced buy signal emerges for USD/CAD, making it the currency pair to watch closely as month-end adjustments kick in.
Key Points:
Equity Market Performance: Global equity markets have been on a downtrend for the entire month, signaling a cautious stance among investors.
USD Strength: The USD has demonstrated resilience and strength, outperforming other currencies throughout the month. This positions it favorably for month-end portfolio adjustments.
Portfolio Rebalancing: Considering the movement in equity markets and the strong USD performance, Credit Agricole's model suggests that investors may show a mild preference for buying USD in their month-end portfolio rebalancing.
Strongest Signal for USD/CAD: Among various currency pairs, the strongest signal for a buy comes in the case of USD vs CAD. This makes it the focal point for traders looking to capitalize on month-end flows.
Market Impact:
Traders and investors should keep an eye on the USD/CAD currency pair, as the strongest buy signal points towards this pair. As month-end portfolio rebalancing takes place, moderate buying pressure on the USD is anticipated, which could result in market movements favoring the U.S. dollar.
Conclusion:
Credit Agricole's month-end fixing model suggests that the downward performance of equity markets, coupled with the USD's robust performance this month, will likely lead to moderate USD buying during month-end portfolio rebalancing. The strongest buy signal is noted in the case of USD/CAD, offering trading opportunities as the month draws to a close.
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