Crédit Agricole says corporate demand points to Pound buying at month-end, although mild portfolio rebalancing flows may favour the US Dollar.
Pound Sterling traded close to 1.3290 against the US Dollar and 1.1670 against the Euro on Wednesday, with month-end currency flows becoming an increasingly important influence as July draws to a close.
Crédit Agricole sees two competing forces at work. Its portfolio-rebalancing model points to mild Dollar demand, while data from corporate clients suggest businesses are buying both Sterling and the Euro.
The bank said global equity markets were “somewhat mixed in July”, while the Dollar had also delivered an uneven performance across the major currencies.
Once equity moves are adjusted for market capitalisation and exchange-rate performance, the model indicates that month-end rebalancing flows are “likely to be mild USD buying across the board”.
That creates a modest headwind for GBP/USD, which has already retreated sharply from its mid-July high near 1.3540.
Sterling’s corporate flow picture is more supportive.
Crédit Agricole said its corporate model was “pointing to EUR buying and GBP buying at the end of the month”, potentially cushioning the Pound against the Dollar demand generated by institutional portfolio rebalancing.
The split matters because different groups of market participants are responding to different incentives.
Global asset managers may need to adjust currency hedges after changes in international equity markets. Companies, meanwhile, may be converting export revenues, settling invoices or completing routine balance-sheet transactions as the month ends.
Those flows can collide during the final trading sessions, producing sharp but sometimes short-lived currency moves.
The latest Exchange Rates UK chart above shows Pound Sterling’s performance has varied widely across its principal crosses.
GBP/JPY remains the strongest of the group, up around 3.2% since the end of 2025, while GBP/EUR is approximately 1.8% higher and GBP/CAD has gained around 1.5%.
By contrast, GBP/USD is down roughly 1.2% this year, while GBP/AUD has fallen just over 5%.
The chart also shows that Sterling’s recent weakness has not been universal. The Pound remains comfortably above its year-opening level against the Euro and Yen, even as Cable has fallen back below 1.33.
Crédit Agricole describes its month-end framework as a model that uses “FX and equity market moves to predict investors’ hedging behaviour and thus FX moves at month-end”.
The bank also tracks “the net buying and selling of EUR and GBP” by its corporate franchise in the days before month-end, giving it a second perspective on flows that may not be visible in broader market data.
In July, those two signals are pulling in opposite directions.
Near-Term Pound Sterling Forecast: Corporate GBP Demand May Cushion Dollar-Led Month-End Pressure
The flow picture suggests Sterling may receive some support into month-end, but the outlook is not a straightforward bullish one.
Corporate Pound buying could help GBP/USD hold above its recent lows, particularly if Dollar demand from portfolio rebalancing remains as mild as Crédit Agricole expects.
A stronger-than-anticipated wave of Dollar buying would leave Cable vulnerable after its recent slide towards 1.33. The pair has already fallen from 1.3539 on 15 July to around 1.3290, while the July low stands near 1.3221.
GBP/EUR may be less exposed to that Dollar dynamic, although simultaneous corporate demand for both Sterling and the Euro could limit the directional impact on the cross.
The final sessions of the month may therefore be less about a clean Sterling trend and more about which flow arrives with greater force.
Crédit Agricole’s message is a nuanced one: institutional rebalancing favours modest Dollar demand, but companies appear to be using current levels to buy Pounds. That tension could make the month-end fix livelier than the relatively calm headline rates suggest.
