Citi sees a scope fir further USD upside, though if today is any indication, the idea of USD fixing demand into month end (tomorrow) is tenuous.
"CitiFX Strategy continues to see further upside in USD and global rates as well a decline in risk assets. For rates, they note some two-way event risks (month-end rebalancing, Tokyo CPI, etc) as well as rising short positioning particularly for US rates, despite overall upside momentum. We also think the recent sell-off in risk assets will continue for now," Citi notes.
"For USD, we add that our colleagues’ month-end FX hedge rebalancing model points to USD buying against all currencies," Citi adds.
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