News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Tune in to @IlyaSpivak 's #webinar at 10:00 PM ET/3:00 AM GMT for insight on the cross-market outlook in the week ahead. Register here: https://t.co/E213bTtq5C https://t.co/Sj2NSgZ4xD
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/8G8mUX4so6 https://t.co/MAn2EL32sU
  • In the week ahead, around 25% of S&P 500 companies will release their results, including GE, Johnson & Johnson, 3M, Microsoft, Boeing, AT&T, Facebook, Apple, Tesla, Visa and Amazon. Read more on my earnings outlook report. https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/01/17/Dow-Nasdaq-SP-500-Outlook-Earnings-May-Bring-Positive-Surprises.html
  • Wall Street Futures Update: Dow Jones (+0.20%) S&P 500 (+0.28%) Nasdaq 100 (+0.51%) [delayed] -BBG
  • Nearly 80% of the S&P 500 constituents closed in the red on Friday, dragged by materials (-0.43%), financials (-0.38%) and energy (-0.34%) whereas defensive utilities (+0.20%), real estate (+0.15%) and communication services (+0.02%) outperformed. https://t.co/vf08Fhfvxd
  • Traders focus a lot of their energy on spotting the perfect time to enter a trade. While this is important, it is ultimately where traders choose to exit trades that will determine success. Learn about the three types of trading exit strategies here: https://t.co/muYkTNXH7s https://t.co/fSRW0Z8mNQ
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/RyMqsHehsY
  • RT @GunjanJS: This is pretty wild. Last year, in RECORD year for options, about 30 million contracts traded daily. This year, it’s been mo…
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCZ9dzS https://t.co/KD6mfkiCaW
  • What are some technical and fundamental factors affecting the equities market? Get your free forecast here: https://t.co/YQG1aaIT8C #DailyFXGuides https://t.co/TEoSjMpMBo
Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

Christopher Vecchio, CFA, Senior Strategist
Advertisement

December Forex Seasonality Overview:

  • December typically brings cheer for the Australian and New Zealand Dollars, while the US Dollar is left with coal.
  • DXY Index weakness, seasonally, can be attributed to its largest component, the Euro (57.6% of weighting), and the Canadian Dollar (9.1% of weighting).
  • December hasn’t brought the Santa Claus Rally for US stocks in recent years, but gold prices have tended to do quite well in the last month of trading.

Seasonal Trends Not in US Dollar's Favor

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.

Monthly Forex Seasonality Summary – December 2020 (Chart 1)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness
Forex for Beginners
Forex for Beginners
Recommended by Christopher Vecchio, CFA
Forex for Beginners
Get My Guide

Forex Seasonality in Euro (via EUR/USD) (Chart 2)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a very bullish month for EUR/USD, 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 +1.21%. Over the past 10-years, it has been the third best month of the year, averaging a gain of +0.54%.

EUR Forecast
EUR Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free EUR Forecast
Get My Guide

Forex Seasonality in British Pound (via GBP/USD) (Chart 3)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a neutral month for GBP/USD, from a seasonality perspective. Over the past 5-years, it has been the fifth best month of the year for the pair, averaging a loss of -0.19%. Over the past 10-years, it has been the fifth best month of the year, averaging a gain of +0.06%.

GBP Forecast
GBP Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free GBP Forecast
Get My Guide

Forex Seasonality in Japanese Yen (via USD/JPY) (Chart 4)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a neutral month for USD/JPY, from a seasonality perspective. Over the past 5-years, it has been the eighth best month of the year for the pair, averaging a loss of -0.85%. Over the past 10-years, it has been the sixth best month of the year, averaging a gain of +0.07%.

JPY Forecast
JPY Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free JPY Forecast
Get My Guide

Forex Seasonality in Australian Dollar (via AUD/USD) (Chart 5)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a moderately bullish month for AUD/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 +0.39%. Over the past 10-years, it has been the seventh best month of the year, averaging a gain of +0.16%.

AUD Forecast
AUD Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free AUD Forecast
Get My Guide

Forex Seasonality in New Zealand Dollar (via NZD/USD) (Chart 6)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a very bullish month for NZD/USD, 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 +1.65%. Over the past 10-years, it has been the best month of the year, averaging a gain of +1.45%.

Forex Seasonality in Canadian Dollar (via USD/CAD) (Chart 7)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a moderately bullish month for USD/CAD, from a seasonality perspective. Over the past 5-years, it has been the eighth best month of the year for the pair, averaging a gain of +0.29%. Over the past 10-years, it has been the seventh best month of the year, averaging a gain of +0.07%.

Forex Seasonality in Swiss Franc (via USD/CHF) (Chart 8)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a very bearish month for USD/CHF, 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 -1.67%. Over the past 10-years, it has been the second worst month of the year, averaging a loss of -1.22%.

Seasonality in US S&P 500 (Chart 9)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a neutral month for the US S&P 500, from a seasonality perspective. Over the past 5-years, it has been the worst month of the year for the index, averaging a loss of -1.05%. Over the past 10-years, it has been the ninth best month of the year, averaging a gain of +0.48%.

Equities Forecast
Equities Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free Equities Forecast
Get My Guide

Seasonality in Gold (via XAU/USD) (Chart 10)

Monthly Forex Seasonality - December 2020: End of Year Favors EUR, NZD Strength; USD Weakness

December is a very bullish month for gold (XAU/USD), from a seasonality perspective. Over the past 5-years, it has been the fourth best month of the year for the precious metal, averaging a gain of +1.67%. Over the past 10-years, it has been the fifth worst month of the year, averaging a loss of -0.45%.

Gold Forecast
Gold Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free Gold Forecast
Get My Guide

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

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

DISCLOSURES