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Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

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September FX Seasonality Overview:

  • The ninth month of the year typically sees a strong performance by the US Dollar.
  • The Euro and the Japanese Yen tend to underperform the rest of the majors in September.
  • September has been a weak month for both gold prices and US stocks.

The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. For September, our focus is on the trailing 5-year and 10-year performances, both of which capture trading during the winddown of aggressive central bank intervention beginning with the 2008/2009 Global Financial Crisis – not dissimilar from the environment we find ourselves in now.

Nevertheless, as has been the case for the past six months, continued atypical conditions diminish the dependability of using seasonality as a significant price action indicator. It remains that case that global commodity markets remain distressed amid Russia’s continued invasion of Ukraine, and global supply chains are still dealing with China’s on-again, off-again zero-COVID strategy. Thus, we must conclude that strategies based around seasonality tendencies are still unreliable compared to previous years.

Monthly Forex Seasonality Summary – September 2022

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

Forex Seasonality in Euro (via EUR/USD)

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September is a bearish month for EUR/USD, from a seasonality perspective. Over the past 5-years, it has been the second worst month of the year for the pair, averaging a loss of -1.06%. Over the past 10-years, it has been the fifth worst month of the year, averaging a loss of -0.42%.

Forex Seasonality in British Pound (via GBP/USD)

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September is a mixed month for GBP/USD, from a seasonality perspective. Over the past 5-years, it has been the sixth worst month of the year for the pair, averaging a loss of -0.03%. Over the past 10-years, it has been the third best month of the year, averaging a gain of +0.12%.

Forex Seasonality in Japanese Yen (via USD/JPY)

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September isa bullish month for USD/JPY, from a seasonality perspective. Over the past 5-years, it has been the best month of the year for the pair, averaging a gain of +1.43%. Over the past 10-years, it has been the third best month of the year, averaging a gain of +0.89%.

Forex Seasonality in Australian Dollar (via AUD/USD)

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September is a bearish month for AUD/USD, from a seasonality perspective. Over the past 5-years, it has been the third worst month of the year for the pair, averaging a loss of -0.96%. Over the past 10-years, it has been the fourth worst month of the year, averaging a loss of -0.52%.

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

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September isa mixed month for NZD/USD, 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 -0.89%. Over the past 10-years, it has been the fifth worst month of the year, averaging a gain of +0.11%.

Forex Seasonality in Canadian Dollar (via USD/CAD)

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September is a bullish month for USD/CAD, from a seasonality perspective. Over the past 5-years, it has been the fifth best month of the year for the pair, averaging a gain of +0.19%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.30%.

Forex Seasonality in Swiss Franc (via USD/CHF)

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September is a bullish month for USD/CHF, from a seasonality perspective. Over the past 5-years, it has been the best month of the year for the pair, averaging a gain of +1.36%. Over the past 10-years, it has been the third best month of the year, averaging a gain of +0.59%.

Forex Seasonality in US S&P 500

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September isa bearish month for the US S&P 500, from a seasonality perspective. Over the past 5-years, it has been the second worst month of the year for the index, averaging a loss of -0.92%. Over the past 10-years, it has been the worst month of the year, averaging a loss of -0.35%.

Forex Seasonality in Gold (via XAU/USD)

Monthly Forex Seasonality – September 2022: US Dollar Stronger; Gold & Stocks Weaker

September is a very bearish month for gold (XAU/USD), from a seasonality perspective. Over the past 5-years, it has been the worst month of the year for the precious metal, averaging a loss of -2.89%. Over the past 10-years, it has been the second worst month of the year, averaging a loss of -2.18%.

— Written by Christopher Vecchio, CFA, Senior Strategist