Juan asks: I remember reading something in Forex live last month where one of the commentators was explaining that towards the end of the month, the EUR tends to go up. I believe the reasoning was that banks buy EUR at the end of the month ( I don’t recall exactly why). Should we expect the EUR to go up between today and Monday?
Answer: Great question, Juan. It varies from month to month, but what happens is that passive fund managers like index funds need to rebalance portfolios each month. If European stocks under-perform US stocks during the month, the fund will become too long of dollars versus its benchmark. Those excess dollars are sold and euros bought, for example. My guess is that European stocks have underperformed the S&P this month, but I have not done the research…
