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2025-07-30 16:38:06
Is the End-of-Month Storm Coming? A Dollar Sell-Off May Sweep the Global Forex Market. ⑴ On the evening of July 30th, Beijing time, the month-end exchange rate hedging rebalancing models of several banks all pointed to a common theme: the US dollar is facing selling pressure. ⑵ Despite the recent rebound in the US dollar, this potential selling signal cannot be ignored. ⑶ Crédit Agricole CIB's model already signaled a broad-based dollar sell-off at the beginning of this week, with the strongest signal against the euro. ⑷ The bank's corporate cash flow model also points to euro buying and pound selling at the end of the month. ⑸ Nomura's month-end model also points to a relatively broad dollar sell-off, with the strongest signal against the euro. ⑹ Deutsche Bank predicts that the strength of the month-end model signal may weaken slightly, given the impact of this week's Federal Reserve and Bank of Japan policy announcements and Friday's US July employment data. ⑺ However, based on relative stock performance, Deutsche Bank still believes that the US dollar will sell against the Swiss franc, Japanese yen, euro, and New Zealand dollar, with the strongest selling signal against the Norwegian krone. ⑻ Deutsche Bank also highlighted seasonal trends at the end of July, indicating that the strongest signal for USD strength against the Australian dollar and the Norwegian krone occurred on August 1st. ⑼ The second strongest seasonal trend was USD/JPY selling on July 30th. Given the recent USD/JPY rebound, this should attract selling around 149-150.00. ⑽ Market participants should be wary of exchange rate fluctuations caused by month-end capital flows, particularly the potential for a widespread USD pullback.
