Global FX Strategy: FX and month-end equity rebalancing: June ‘26

Research evidence excerpt

Global FX Strategy: FX and month-end equity rebalancing: June ‘26

Global Research

25 June 2026ab

Global FX Strategy FX

GlobalFX and month-end equity rebalancing: June '26

Alvise Marino

Strategist

Figure 1: Equity rebalancing flows likely to support USD at month end alvise.marino@ubs.com

+41-44-237 8440

Shahab Jalinoos

shahab.jalinoos@ubs.com

d +1-212-882-5532

nth en Benjamin Jarrett

at mo Strategist

rt USD benjamin.jarrett@ubs.com

+44-20-7567 5430

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Meena Bassily ely to

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Eq ui ty r eb a l a n c i

Source: Bloomberg, UBS calculations

Equity rebalancing flows are expected to support the USD into month end. The

month of June thus far saw US equity markets underperform G10 peers (Figure 2USequitymarketsunderperformedinJuneMTD). USD

should therefore benefit from rebalancing towards US assets at month end (Figure 1EquityrebalancingflowslikelytosuportUSDatmonthend) .

This effect is likely to be most pronounced vs EUR, JPY and CHF. Our model shows

the strongest USD buying signals vs EUR, JPY and CHF. This reflects the relative strength

of local equity markets vs the S&P 500, with Eurostoxx 50, the Nikkei and the Swiss

Market Index the strongest G10 performers in June to date. Signals in other currencies

are weak and inconclusive.

The timing of month end rebalancing flows varies across currencies. In the

updated version of our model (see here for details), we produce signals for each of the 5

trading days leading up to month end. The "hit ratio" of these signals (i.e. the % of

times it matched the direction of realized FX price action) allows us to make inferences

on the timing of these rebalancing flows - and of the likely FX reaction. For JPY and CHF,