AUTOREFRESH 
Good month for US stocks bad for USD at month-end
By Jamie Coleman || December 31, 2010 at 14:53 GMT
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Passive investors like overseas index funds often rebalance portfolios at the end of each month. For instance, this month, the S&P 500, the most indexed-to index in the world is up approximately 6.5%. That makes the fund holding the shares longer 6.5% more dollars than at the beginning of the month. Those excess dollars are often sold off for rebalancing purposes at the month-end fix.
Long story short: The better month stocks have, the worse monthly fix the dollar has.
This month, there is a catch though: the massive slide in US bonds this month may offset some of the equity-generated flow…
With the dollar weaker over the last few sessions, looks like much of this may already be baked into the proverbial market cake…
I remember that at some year ends ( 2004, 2008) the US dollar falls sharply only to regain a lot of territory after New Year Eve….The same occurs this year, apparently. But why? Are you so sure that the “Bonus subject” is already entirely baked in the cake for hedge punds, mutual funds, etc? I am not so sure, and as a depreciation in the Us Dollar means anyone who has any other currency has more and more dollars, and won more and more ( and in that character pays bigger bonuses…) the tempation to sell de US Dollar in the year end and “fix” an artificial low value for the greenback may be very high….Look at the EURO, what is the logic of this apreciation? It is soaring and soaring, and the periphery bonds yields are very , very near, record levels for Spain, Italy,Belgium,Portugal, Ireland and Greece….Crazy markets!!!!