• Financial Institutions
  • Corporations
  • Travelers
  • Foreign Bank Note Exchange
  • International Drafts
  • International Wire Transfers
  • Global EFT
  • Foreign Check Clearing
  • Foreign Draft Issuance
  • Travel
  • Technology Companies
  • Payroll
  • Healthcare
  • Nonprofit
  • Partnerships

Month-end USD sales appear to have run their course

Erik July 31st, 2020
Month-end USD sales appear to have run their course

Take control of your international payments with CXI FX Now.

• Low transfer fees & great rates
• Fast international payments
• Safety and security
• Unparalleled customer service
• Consultative approach

Interested in creating a custom foreign exchange trading plan? Contact us or call EBC's trading desk directly at 1-888-729-9716.


Get real-time market coverage on twitter at @EBCTradeDesk or sign up to currency insider here.



  • USD collapses lower yesterday afternoon after feeble post-Fed bounce.
  • Did portfolio managers jump the gun with expected month-end USD sales?
  • Ramp in FANG stocks ahead of earnings, helped risk sentiment into the NY close.
  • USD now recovering into NY trade today.  Have the month-end flows passed?
  • Canada reports better than expected GDP for May, +4.5% MoM vs +3.5%.
  • Huge USDCAD option expiries in play today + London fix flows at 11amET.



Dollar/CAD traders are trying to buy the dips this morning as month-end dollar selling seems to have run its course.  The timing of these re-balancing flows is notoriously difficult to predict but we’d wager that a lot of portfolio managers jumped the gun yesterday given the broader USD’s inability to meaningfully bounce after the Fed meeting.  There’s been a lot of chatter about CAD’s under-performance yesterday amidst these flows and we think this was largely because of September WTI’s 5% implosion; a sell-off that has now ruined the oil market’s upside breakout pattern from July 21.  We think some pre-hedging ahead of today’s massive 1.3400 option expiry (now valued at $2.2blnUSD) also attracted CAD sales.  

Canada just reported a slightly better than expected May GDP figure (+4.5% vs +3.5%), but the market’s lack of reaction tells you everything you need to know...old news…move on.  Today’s 10amET NY option cut also features a $2.3blnUSD expiry at 1.3500, although the magnetizing effect of this strike shouldn’t come into play unless USDCAD breaks above 1.3450 in the next hour.  Watch for some potential volatility going into the 11amET London fix, in case these month-end flows aren’t over just yet.









Euro/dollar ripped higher yesterday and, while Trump’s election-delay thoughts helped spark the move, we felt the rally was largely driven by month-end USD sales and perhaps a sprinkle of “risk-on” from well-timed buying of large-cap US tech names going into last night’s better than expected Nasdaq earnings parade.  The market’s subsequent reversal lower from its overnight highs above 1.19 proves the point.  These flows are fickle and they eventually pass.  

We don’t seriously believe traders are worried about the US elections getting postponed and we think the growing talk of the USD’s reserve currency status being at risk is all hogwash.  The global eurodollar system, no matter how broken it is, ain’t going anywhere anytime soon. 








Sterling continues to rip the face of whatever Brexit-inspired GBPUSD shorts still remain in this market.  It closed NY trade very strongly yesterday on broad USD weakness; shattering chart resistance at the 1.2970s and 1.3040s in the process…and the market now looks poised to shoot for the 1.3200-1.3210 level.  Do not stand in front of this freight train for now as the market is not trading off UK fundamentals.








The Aussie recovered to close NY trade above the 0.7170s yesterday and we think month-end USD sales and some US tech stock buying were also the drivers.  These flows seemed to have passed however, which could now force another test of the pivotal 0.7170 level going into the London fix at 11amET.








Dollar/yen traders made up their mind yesterday afternoon and continued to follow the broader USD lower when EURUSD cracked above the 1.1800 mark.  We think the ongoing downtrend for US yields continues to add weight to this market, but USDJPY’s correlation with broader USD flows has been even tighter of late…and so we’re watching this dynamic even more closely.  

Japanese Finance Minister Taro Aso said the same thing that one of his officials said the day before, with regards to recent yen strength.  “Stability is important, so I’m closely monitoring it with a sense of urgency.”  This was not the reason behind USDJPY’s bounce off the 104.20s and back above the 104.70s support level overnight, but it sure feels like Japanese officials don’t like the market trading below the 105 handle. 







Charts: Reuters Eikon

About the Author

Erik Bregar Director, Head of FX Strategy at Exchange Bank of Canada

Erik Bregar - Director, Head of FX Strategy

linkedin twitter

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan? Contact us or call CXI's trading desk directly at 1-833-572-8933.

About Currency Exchange International
Currency Exchange International, CXI, is the leading provider of comprehensive foreign exchange services, risk management solutions and integrated international payments processing technology in North America. CXI’s relationship-driven approach ensures clients receive tailored solutions and world-class customer service. Through innovative and trusted FX software platforms, CXI delivers versatile foreign exchange services to our clients, so that they can efficiently manage and streamline their foreign currency and global payment needs. CXI is a trusted partner among financial institutions, corporations and retail markets around the world. To learn more, visit: www.ceifx.com


Disclaimer: All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement. This publication has been prepared by Currency Exchange International for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Currency Exchange International, its affiliates or any of their employees incur any responsibility. Neither Currency Exchange International nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note thatthe manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Currency Exchange International products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Currency Exchange International.