We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.41%, while traders in US 500 are at opposite extremes with 78.13%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/zwiEeGWqsC
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: -0.04% 🇯🇵JPY: -0.09% 🇳🇿NZD: -0.13% 🇪🇺EUR: -0.19% 🇬🇧GBP: -0.31% 🇦🇺AUD: -0.38% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/BvewuY23QZ
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.05% France 40: -0.08% Wall Street: -0.12% FTSE 100: -0.18% US 500: -0.22% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/wzqg2S1F14
  • Wall Street Futures Update: S&P 500 (-0.225%) Dow Jones (-0.126%) Nasdaq Composite (-0.194%) [delayed] -BBG
  • The US Dollar is attempting to find direction against the Singapore Dollar, Philippine Peso and Indonesian Rupiah as technical levels hold. The Malaysian Ringgit eyes a key trend line. Get your market update from @ddubrovskyFX here:https://t.co/lcSLkOnJgQ https://t.co/u3JfwxpCvh
  • The $USD is falling against #ASEAN currencies such as the Singapore Dollar and Indonesian Rupiah as stock markets rise. Watch out for US-China escalation and Brexit talks. Get your market update from @ddubrovskyFX here:https://t.co/PziC8KZaIC https://t.co/cQWfmGnb4H
  • (Commodities Briefing) #Gold prices sank as #ADP estimated a smaller contraction in jobs ahead of #NFPs. #CrudeOil prices may fall with the OPEC+ meeting in doubt as #WTI left behind a Doji candlestick #OPEC - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/06/04/Gold-Prices-Sink-Crude-Oil-Risks-Falling-with-OPEC-Meeting-in-Doubt.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/fjAnPB3Rc1
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/fvyX0wfWcg
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: 0.34% Silver: -0.33% Oil - US Crude: -1.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/VFJfH2lsYE
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.00% 🇨🇭CHF: -0.05% 🇳🇿NZD: -0.07% 🇨🇦CAD: -0.12% 🇬🇧GBP: -0.25% 🇦🇺AUD: -0.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/9wAQM4BGpE
April Forex Seasonality Favors US Dollar Weakness - Against Whom?

April Forex Seasonality Favors US Dollar Weakness - Against Whom?

2014-04-01 10:00:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- April has been the worst month of the year for the US Dollar the past 5 years.

- British Pound, Australian Dollar could be leaders.

- Don’t discount Canadian Dollar rebound – or gains in the S&P 500.

See the full rundown of seasonal patterns broken down by currency pairs below, and to receive reports from this analyst, sign up for Christopher’s distribution list.

The beginning of the month warrants a review of the seasonal patterns that have influenced forex markets over the past several years. Last month’s review saw several currencies and instruments break from their 20 year seasonal patterns: the British Pound and the Euro fell rather than rallied; the Swiss Franc and the Canadian Dollar weren’t as quite as strong as history suggested.

As a result of several pairs continuing to diverge from the longer-term historical trend, for April we’ve decided to focus on a shorter-term time period: 2009-2013. The small sample size is not ideal, and we recognize that there is increased statistical stability with using longer time periods. However, because of the specific uniqueness of the past 5 years relative to any other time period in market history – the era of quantitative easing – we’ve elected to attempt to increase the stability of the estimates with the shorter time period.

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_Picture_1.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

In the QE era (which may be winding down now that the Federal Reserve has cut QE3 to $55B/month), it’s evident that the US Dollar has been the clear loser for the month of April. From 2009-2013, April was the worst month of the year for the US Dollar.

Unless US Treasury yields on the long-end (10Y and 30Y) begin to rise (they have fallen since the QE3 taper was announced in December 2013) or there is a materially negative shock to risk appetite stoking a run to relative safe havens, it could be another rough April for the US Dollar.

Forex Seasonality in the Euro

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1028.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

April is largely a bullish month for EURUSD and tends to exhibit the same pattern as March. The upside and downside changes are largely equal though EURUSD will end the month with larger gains. The seasonal outlook is bullish.

Forex Seasonality in the British Pound

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1029.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

Data shows that the fourth month of the year is the first month that the British Pound realizes gains. GBPUSD has consecutively gained in the past four years. Statistics also shows that Sterling’s downside is significantly limited. The seasonal outlook is bullish.

Forex Seasonality in the Japanese Yen

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1030.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

Data shows that April is the first month of the year the USDJPY tends to realize losses. In the past five years the monthly change in April has risen, though the tendency has been largely to the downside. The seasonal outlook is neutral.

Forex Seasonality in the Australian Dollar

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1031.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

The Australian Dollar tends exhibits many of the characteristics in March. In the past five years AUDUSD has only realized one loss in April and it was minor compared previous gains. The seasonal outlook is bullish.

Forex Seasonality in the USDOLLAR

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1032.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

As an amalgamation of the Australian Dollar, British Pound, Euro, and Japanese Yen, the USDOLLAR Index serves as a proxy for the US Dollar more broadly. Historically, April is the first month of the year that the USDollar realizes large losses. The seasonal outlook is bearish.

Forex Seasonality in the New Zealand Dollar

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1033.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

Seasonality favors a strong New Zealand Dollar in April. NZDUSD has not realized a single loss in April in the past five years.

Forex Seasonality in the Canadian Dollar

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1034.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

Seasonality tends to favor a stronger Canadian Dollar (weaker USDCAD) in April. Notably, the losses in April have been decreasing since 2009. Yet, the seasonal outlook is bearish USDCAD.

Forex Seasonality in the Swiss Franc

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1035.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

Seasonality favors a slightly weaker USDCHF in April. However, seasonal outlook is Neutral as April 2011 deviated significantly compared to the other years.

Seasonality in the US S&P 500 Index

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1036.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

April continues to rally in S&P as seasonality favors a moderately bullish month. April 2012 was the first time S&P realized a loss and it was minor compared to the gains. Seasonal outlook is bullish.

Seasonality in Gold (XAUUSD)

April-Forex-Seasonality-Favors-US-Dollar-Weakness-Against-Whom_body_x0000_i1037.png, April Forex Seasonality Favors US Dollar Weakness - Against Whom?

Gold is largely neutral for the month of April. Statics show that the average change has been mostly equal though the month tends to end on a bullish note. April 2013 posted a large loss mostly counteracting the recent bullish tendency. Nonetheless, seasonal outlook is neutral.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.