Credit Agricole anticipates broad-based mild selling of the USD at month-end, according to their FX rebalancing model. The strongest sell signal is expected against the EUR. <\/p>\n
Their corporate FX flow model suggests buying EUR and selling GBP during this period. Based on these insights, Credit Agricole plans to buy EUR against a basket of USD and GBP until 1600 GMT on 31 July, unless market conditions force an early exit. No specific entry or stop levels are provided.<\/p>\n
We’re positioning for a weaker US dollar into the end of July, based on the firm’s rebalancing model. This suggests looking at derivative trades that benefit from a falling greenback, such as buying EUR\/USD call options. The signal is for mild selling, so we shouldn’t expect a dramatic move.<\/p>\n
This view is strengthened by the strong performance of U.S. equities this month. With the S&P 500 gaining over 3.5% in July, global fund managers will likely sell dollars to rebalance their portfolios. We see this as a predictable flow that often pressures the dollar in the final days of the trading month.<\/p>\n
The corporate flow model also signals a divergence, favoring the euro while expecting sales of the British pound. This suggests that options on the EUR\/GBP cross rate could be an interesting play, potentially buying calls to target upside. It aligns with the strategy of buying the single currency against a weighted basket.<\/p>\n
Historically, these month-end flows are not guaranteed and can be overshadowed by major data releases. We must remember that this week also holds a key inflation report and a statement from the central bank. Therefore, any positions should be managed with tight stops, especially since Low notes that no specific entry levels were provided.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Credit Agricole plans EUR purchases against USD and GBP amid anticipated USD weakness and favorable EUR signals.<\/p>\n","protected":false},"author":62,"featured_media":16960,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27521","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=27521"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27521\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16960"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=27521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=27521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=27521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}