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Today is the last day of the corporate month-end, occurring two days prior to the end of the month. This timeframe usually coincides with a strengthening of the USD, a pattern that has been noted until now. The impact is often most apparent near the London 4pm fix. The increased demand for USD has driven the EUR down below 1.16, completing a full retracement that was set in motion by Powell's influence. The EUR/USD pair is currently falling below last week's low of 1.1582. Meanwhile, USD/JPY is testing its resistance level at 148. Historically, since 2010, the USD/JPY has increased 54% of the time during the corporate month-end.
Credit Agricole’s month-end rebalancing model suggests a modest selling pressure on the dollar across the board. The primary factor driving this signal is the strong performance of U.S. equities throughout August, which is expected to generate rebalancing flows that slightly weigh against the dollar. While the dollar showed resilience during the month, Credit Agricole highlights that equity strength—adjusted for market capitalization and FX movements—indicates mild dollar selling pressure. Among G10 currencies, the Norwegian krone (NOK) is projected to experience the strongest sell signal, while other G10 currencies are likely to see only marginal dollar selling leading into the month-end fix.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!