Citigroup Rule Model Says Central Banks May Sell U.S. Dollars This Month
Central bank reserve managers may be net sellers of U.S. dollars this month after the conditions activating a trading rule were met, Citigroup Inc. said.
The dollar fell last month; reserve managers increased their currency holdings, on a valuation-adjusted basis, and by more than the previous month, meaning dollar sales are likely in November, Steven Englander, global head of currency strategy at Citigroup in New York, wrote in a research report today.
“If conditions one through three are met, the rule says buy euro-dollar on the seventh business day of the month, by which time the early reporting central banks in our sample will have reported their reserve levels, and hold the short dollar position through the seventh day of the next month,” he said.
The Dollar Index, which measures the greenback against a basket of its most-traded peers, was little changed at 76.977 as of 4:06 p.m. in London. It is 1.1 percent weaker this year.
To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
Rate this Page