Credit Agricole indicates month-end activities show mild dollar selling, particularly against the euro and pound.
by VT Markets
/
Jul 29, 2025
Credit Agricole expects a mild overall selling of the USD at the end of the month, according to their FX rebalancing model. The most significant selling is anticipated against the EUR.
Their corporate FX flow model suggests buying EUR and selling GBP during this time. Based on this analysis, Credit Agricole plans to buy EUR against a mix of USD and GBP until 1600 GMT on 31 July, unless market conditions require an early exit. No specific entry or stop levels have been shared.
Positioning For A Weaker US Dollar
We are preparing for a weaker US dollar as July comes to a close, following the firm’s rebalancing model. This suggests considering derivative trades that benefit from a falling dollar, such as buying EUR/USD call options. The signal indicates mild selling, so we shouldn’t expect large movements.
This view is supported by the strong performance of U.S. stocks this month. With the S&P 500 gaining over 3.5% in July, global fund managers will likely sell dollars to adjust their portfolios. We see this as a predictable trend that often puts pressure on the dollar in the last days of the trading month.
The corporate flow model also points to a divergence, favoring the euro while suggesting sales of the British pound. This means options on the EUR/GBP exchange rate could be an interesting opportunity, especially buying calls to aim for upward movement. This aligns with the strategy of buying the euro against a weighted mix.
Managing Positions With Tight Stops
Historically, these month-end flows aren’t guaranteed and can be affected by major data releases. This week also includes a significant inflation report and a central bank statement. Therefore, positions should be managed with tight stops, especially since no specific entry levels have been provided.
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by VT Markets
Jul 29, 2025
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