📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Citi exits AUD/USD position ahead of core PCE data release

Published 04/25/2024, 11:50 AM
© Reuters.

On Thursday, Citi announced its decision to exit a long position in the AUD/USD currency pair, citing recent economic data that suggests potential risk to their initial forecast. The firm had entered the trade with expectations that the core Personal Consumption Expenditures (PCE) price index would print below the Federal Reserve's forecasts.

However, the latest quarterly core PCE price index reported a 3.7% increase compared to the expected 3.4%, leading Citi to reassess the situation.

Citi had placed the trade based on the anticipation that the core PCE data, scheduled for release tomorrow, would come in below the predictions of both Citi and the Federal Reserve, which stood at 2.7% year-over-year and 2.8% year-over-year, respectively. The trade was established with a reference spot of 0.6530 at 8:32 AM EST on April 25th.

The move to exit the position was triggered by the higher-than-expected quarterly core PCE price index, which could indicate an upside risk to the upcoming core PCE data. This development prompted Citi to take a cautious approach and exit the trade to avoid potential losses associated with the event risk of the data release.

The firm reported a modest gain of 0.54% from the trade, choosing to secure this profit rather than face the uncertainty of the market's reaction to the core PCE data. The decision reflects the firm's risk management strategy in response to economic indicators that may influence market conditions.

Citi's exit from the AUD/USD position highlights the influence of economic data on trading strategies and the importance of timely decision-making in the face of evolving market information. The core PCE price index is a key indicator of inflation and is closely monitored by the Federal Reserve when setting monetary policy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.