Pound Sterling to Receive Corporate Support at Month-End

Credit Agricole has identified two competing forces at work in the currency market ahead of month-end. The bank's portfolio-rebalancing model suggests mild dollar demand, while its corporate model points to euro and pound buying.

The Pound Sterling traded near 1.3290 against the US Dollar and 1.1670 against the Euro on Wednesday. Credit Agricole's data indicates that global equity markets were 'somewhat mixed in July', with the dollar delivering an uneven performance across major currencies.

The bank's corporate model is pointing to EUR buying and GBP buying at the end of the month, potentially cushioning the Pound against dollar demand generated by institutional portfolio rebalancing. This could make the month-end fix livelier than headline rates suggest.