Looking to Buy the Euro? Better Do It After the Month Is Over

(Bloomberg) -- Pay day for sellers of the euro seems to come at the end of the month. The currency’s repeated drops then may be down to month-end flows, options-related selling or simply pure coincidence.

The common currency slid below $1.09 Monday for the first time since 2017, in a repeat of the falls through key psychological levels seen on the last days of August and July. The euro headed below $1.10 on Aug. 30, having broken $1.11 on July 31.

The euro has been steadily weakening in recent months against the dollar as the latter benefits from the Federal Reserve turning less dovish and by haven demand amid global trade tensions. While the euro dipped toward $1.09 several times earlier in September, that level only gave way on Monday.

Quarter-end flows have lifted the greenback in recent days due to U.S. corporates repatriating dollars for tax purposes, amid tighter liquidity for the U.S. currency, according to two traders in Europe, who asked not to be identified because they are not authorized to speak publicly. The traders also noted selling of the euro against the yen Monday via options, which may have weighed on the common currency.

• NOTE: Vassilis Karamanis is an FX and rates strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

To contact the reporter on this story: Vassilis Karamanis in Athens at vkaramanis1@bloomberg.net

To contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net, Neil Chatterjee, Anil Varma

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