2026-02-26 08:28:00
It’s nice to wrap up the trading week with it being the final day of the month. And interestingly enough, did you realise that the March calendar is a repeat of February (only with the additional 3 days). In February trading, the dollar has been rather resilient after struggling towards the end of last year. However, the mood has been a bit shaky in the second half of the month.
Geopolitical uncertainty and trade policy uncertainty are two big issues that are plaguing the greenback. No thanks to the erratic policy handling by the US administration of course. And that’s keeping precious metals underpinned amid the continued currency debasement narrative since last year.
As for the dollar itself, that is putting the currency on the rocks as it looks vulnerable to a renewed drop heading into March. But in closing out February trading, Credit Agricole argues that the dollar could find support from month-end flows in at least holding its head above water in the final few days here.
“On the structural side, concerns about rebalancing out of the US remain a drag on the USD and support EUR/USD. The latest spike of US trade policy risks seems to support the bearish USD-view as FX investors shun the US policy and economic uncertainty. In addition, valuation concerns erode the appeal of USD assets.
That said, we also note that the more recent USD recovery has coincided with US stock market weakness. This may suggest that the USD is benefitting from the unwinding of short-USD hedges that foreign investors have put into place. Our month-end rebalancing model predicts that they will continue to buy USD this week.”
Just something to take note of as we move into the closing stages of the week in the next two days. In particular, just be wary of any volatility bouts when we get to the London fix especially.
