" US-China concerns and week global PMIs were among the reasons cited during the USD rally on Monday, which help to underscore why CitiFX Strategy thinks USD strength may have more to go short-term: – USD positioning is rather clean. Per our latest Flows & Positioning update, USD positioning has moved from neutral territory from small long. Selling was primarily driven by real money investors, though there was small selling from leveraged accounts last week too," Citi notes.
"CitiFX Strategy thinks the broader backdrop favors USD short-term. Bullish, bearish GBP and CAD. Why i) positioning ii) month-end selling out the way iii) global risks skew more negative and iv)
USD also tends to appreciate in May, even though we do not know of a
good reason why (alongside several other May seasonality patterns),"