Watch The Clock This Month End
“The same pattern — a sudden surge minutes before 4 p.m. in London on the last trading day of the month, followed by a quick reversal — occurred 31 percent of the time across 14 currency pairs over two years, according to data compiled by Bloomberg. For the most frequently traded pairs, such as euro-dollar, it happened about half the time, the data show. ”
” Bloomberg News reported in June that dealers shared information and used client orders to move the rates to boost trading profit. ”
Well, we do know what to expect this month end.
” US equities have underperformed their G10 counterparts, and US bonds also lost value. As a result, international investors with a passive hedge mandate may need to reduce their currency hedges relatively more on their US assets, which would support USD.” Source : Citi
Yet, we cannot have the USD strengthen too much at the expense of the rest because losses cannot be tolerated. It is almost like double counting to me.
As the day drags into the European open, I am expecting the EUR/USD pair to sit pretty and rally a little before its nice descend after 4 pm London to make the New York close a happy one for all ?