USD loses ground across the board 27.12.2017
With some logic, as I mentioned before, the rebalancing flows based on equity performances is negative USD again this month/quarter/yearend.
In an currency neutral investors’ portfolio , as US equities outperformed, the receivables will have been larger than in other currencies .Hence the moves we see these days to bring the currency outstandings back to equilibrium. Since Japan and Swiss equities have been doing well , the need there is indeed smaller, hence the moves there too, with the respective crosses advancing.
In addition we’re seeing position adjustments as P/L’s need to be consolidated and reported. That is likely why we see currencies such as GBP and NZD in demand as the market is underweight in these.
I’m smalls short USD vs EUR and JPY( based on eco numbers this one) and tiny CAD and AUD just to accompany the move, purely based on the flows, expiries and fixings .
It’s tempting to counter some of these moves, like cable and kiwi for instance, but I will wait until the fixing on the last day to jump in anything against what I see now.
In an illiquid market ,for those who’d like to counter trade the flows, know that moves will generally exaggerate beyond some tech levels, we need to give leeway and look for the next .
Here’s a snapshot of where we stand around 2.00pm gmt