Citigroup (NYSE:C) said with conditions having been met which activate a trading rule, it sees central banks probably being net sellers of U.S. dollars in November.
Steven Englander, global head of currency strategy at Citigroup in New York, wrote, “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.”
Reserve bank managers did three things which should trigger the sell-off said Englander. They increased their holdings in the U.S. dollar, did it on a valuation-adjusted basis, and was higher than the month before.
Under those conditions increased sales of the U.S. dollar are normally the outcome, concluded Englander.
Wednesday, November 10, 2010
Citigroup (NYSE:C) Says Central Banks May Sell US Dollar in November
Labels:
Central Banks,
Citigroup,
US Dollar
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