US dollar climbs to session high into the fix

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The models were wrong

There was some heavy buying of the US dollar into the month-end London fix. That was unexpected with bank models showing dollar selling as likely.

Mixed in with the month-end news was some worrisome vaccine news in regards to variants. That added to the ‘risk off’ tone and contributed to some of the moves. That said, USD/JPY rallied through the fix so I tend to put this latest leg on flows not fundamentals.

I tend to think the trade is to fade big moves on the fix but keep the broader backdrop in mind.

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