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Monthly Forex Seasonality – December 2021: US Dollar Typically Slips into Year-End

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December FX Seasonality Overview:

  • The last month of the year tends to see the greenback fall across the board, while gold and US equities have gained ground recently.
  • December is the second best month of the year for gold prices in recent history.
  • The risk-on attitude is pervasive, with the Australian, Canadian, and New Zealand Dollars tending to rally into year-end.

The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. For December, our focus is on the trailing 5-year and 10-year performances, both of which fully capture trading during the era of quantitative easing and expanding government deficits since the 2008/2009 Global Financial Crisis – not dissimilar from the environment we find ourselves in during the coronavirus pandemic recovery.

Monthly Forex Seasonality Summary – December 2021

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

Forex Seasonality in Euro (via EUR/USD)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a bullish month for EUR/USD, from a seasonality perspective. Over the past 5-years, it has been the second best month of the year for the pair, averaging a gain of +1.14%. Over the past 10-years, it has been the third best month of the year, averaging a gain of +0.48%.

Forex Seasonality in British Pound (via GBP/USD)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a bullish month for GBP/USD, from a seasonality perspective. Over the past 5-years, it has been the fourth best month of the year for the pair, averaging a gain of +0.76%. Over the past 10-years, it has been the third best month of the year, averaging a gain of +0.29%.

Forex Seasonality in Japanese Yen (via USD/JPY)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a mixed month for USD/JPY, from a seasonality perspective. Over the past 5-years, it has been the fifth worst month of the year for the pair, averaging a loss of -0.58%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.28%.

Forex Seasonality in Australian Dollar (via AUD/USD)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a slightly bullish month for AUD/USD, from a seasonality perspective. Over the past 5-years, it has been the third best month of the year for the pair, averaging a gain of +1.18%. Over the past 10-years, it has been the sixth best month of the year, averaging a loss of -0.03%.

Forex Seasonality in New Zealand Dollar (via NZD/USD)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a very bullish month for NZD/USD, from a seasonality perspective. Over the past 5-years, it has been the third best month of the year for the pair, averaging a gain of +1.38%. Over the past 10-years, it has been the second best month of the year, averaging a gain of +1.18%.

Forex Seasonality in Canadian Dollar (via USD/CAD)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a slightly bearish month for USD/CAD, from a seasonality perspective. Over the past 5-years, it has been the fourth worst month of the year for the pair, averaging a loss of -0.84%. Over the past 10-years, it has been the fourth worst month of the year, averaging a gain of +0.14%.

Forex Seasonality in Swiss Franc (via USD/CHF)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a bullish month for USD/CHF, from a seasonality perspective. Over the past 5-years, it has been the worst month of the year for the pair, averaging a loss of -1.67%. Over the past 10-years, it has been the third worst month of the year, averaging a loss of -0.80%.

Forex Seasonality in US S&P 500

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a mixed month for the US S&P 500, from a seasonality perspective. Over the past 5-years, it has been the fifth worst month of the year for the index, averaging a gain of +0.04%. Over the past 10-years, it has been the fifth worst month of the year, averaging a gain of +0.19%.

Forex Seasonality in Gold (via XAU/USD)

Monthly Forex Seasonality - December 2021: US Dollar Typically Slips into Year-End

December is a bullish month for gold (XAU/USD), from a seasonality perspective. Over the past 5-years, it has been the second best month of the year for the precious metal, averaging a gain of +3.11%. Over the past 10-years, it has been the fifth worst month of the year, averaging a loss of -0.02%.

— Written by Christopher Vecchio, CFA, Senior Strategist